Oracle Stock Jumps After Hours On Results, AI News (Live Coverage)

Oracle stock jumped in late trading Tuesday after the company gave upbeat guidance and announced cloud partnerships with OpenAI and Google (GOOGL). The strong move higher came despite fiscal fourth quarter earnings and sales for Oracle (ORCL) coming in lighter than expected.

Oracle posted adjusted earnings of of $1.63 per share from sales of $14.3 billion. On average, analysts were expecting the Austin, Texas-based company to post adjusted earnings of $1.65 per share on sales of $14.56 billion. For the same fiscal fourth quarter a year ago, Oracle posted earnings of $1.67 per share and sales of $13.8 billion.

Along with its results, Oracle announced it would expand its partnership with Microsoft Azure to include training ChatGPT models from OpenAI. The firm also announced a partnership with Google to offer cloud services.

Oracle stock rallied 9% after hours.

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Updated 5:58 pm E.T.

Oracle CEO: Working ‘Quickly As We Can’ To Meet Cloud Demand

Oracle stock pushed higher by around 9% during the company’s analyst call which just ended.

Chief Executive Safra Catz told analysts that she expects Oracle’s sales to grow between 6% and 8% in the quarter. Analysts were projecting sales growth of 7.5% for the August-ending quarter heading into the report, according to FactSet.

But Catz also said the company is projecting double-digit revenue growth for fiscal 2025, which is ahead of projections from analysts. The company also expects revenue growth to accelerate throughout the year as it builds AI-related data center capacity.

“We are working as quickly as we can to get cloud capacity built out,” Catz told analysts.

Catz noted that Oracle signed more than 30 AI-related sales contract totaling $12.5 billion in its fiscal fourth quarter alone. That includes the deal with OpenAI to train ChatGPT in Oracle Cloud.

Analysts highlighted the company’s guidance as a concern for investors heading into the report. The numbers Tuesday appear to have hit the mark.

Updated 5:44 pm E.T

Oracle Stock: OpenAI Deal A ‘Key Win’

Ahead of Oracle’s analyst call at 5 p.m. E.T., analysts offered early takes on Oracle’s results.

Barclays analyst Raimo Lenschow said the company’s AI news and guidance for fiscal 2025 overshadowed lower-than-expected sales.

“True, Q4 revenue missed due to license weakness, but we think the strong RPO growth (44% YoY), double​-​digit revenue growth guidance for FY25 (8.3% consensus), and new partnerships with (Google Cloud Platform and Azure​/​OpenAI are more relevant,” Lenschow wrote to clients. Lenschow holds a positive overweight call on Oracle stock.

Evercore ISI analyst Kirk Materne wrote that there is “always some moving parts” with Oracle earnings reports. But the results appear positive for investors bullish about growth for Oracle’s cloud infrastructure business.

“The announcement that OpenAI will also be using Oracle’s infrastructure is a key win in terms of Oracle’s credibility as an infrastructure platform in an AI world,” Materne wrote. Materne rates Oracle stock a positive outperform.

Updated 5:04 pm E.T.

Oracle Stock: CEO Touts AI Demand

Bullish comments from Oracle Chief Executive Safra Catz are likely helping Oracle stock, despite the Q4 miss.

“In Q3 and Q4, Oracle signed the largest sales contracts in our history—driven by enormous demand for training AI large language models in the Oracle Cloud,” said Oracle Chief Executive Safra Catz in the news release.

Oracle’s closely-watched cloud infrastructure business grew sales 42% year-over-year to $2 billion in the May ending quarter. Oracle Cloud Infrastructure offers cloud-based servers, storage and other computing services to other businesses. OCI is also central to Oracle’s plan to win AI business.

Moreover, OCI has remaining performance obligations, or contracted work, grew 44% year-over-year to $98 billion. That backlog has the company confident it can accelerate sales growth for its next fiscal year, ending in May 2025.

“Throughout fiscal year 2025, I expect continued strong AI demand to push Oracle sales and RPO even higher—and result in double-digit revenue growth this fiscal year,” Catz said in the news release. “I also expect that each successive quarter should grow faster than the previous quarter—as OCI capacity begins to catch up with demand.”

The double-digit revenue growth is ahead of what analysts had previously projected. On average, analyst see Oracle sales growing 8.5% to $57.8 billion for its 2025  fiscal year, according to FactSet.

Updated 4:20 pm E.T.

Upbeat Cloud and AI News

Oracle highlighted positive trends for its cloud infrastructure business. That includes a growing partnership with Microsoft’s Azure cloud division that will have Oracle host workloads for ChatGPT creator OpenAI.

“Our multicloud cooperation with Microsoft expanded significantly in Q4, as we agreed to work together to support Open AI and ChatGPT—and 11 of the 23 OCI datacenters we are building inside Azure went live,” Larry Ellison, Oracle’s chairman and chief technology officer, said in a statement. “As this Azure/OCI cloud capacity becomes available to the large installed base of Microsoft and Oracle customers, it will turbocharge our cloud database growth.”

OpenAI announced that it would seek additional computing capacity though Oracle Cloud Infrastructure, or OCI, just before Oracle reported earnings Tuesday.

“OCI will extend Azure’s platform and enable OpenAI to continue to scale,” said OpenAI Chief Executive Sam Altman in the news release. 

Oracle also announced a deal to provide cloud services in partnership with Google.

Updated 3:45 pm E.T.

Oracle Stock On IBD Live: ‘Worth Watching As Kind Of A Bellwether.’

Oracle was featured on the Tuesday edition of IBD Live.

IBD Live Host Justin Nielsen said Oracle stock is “worth watching as kind of a bellwether, regardless if you’re going to buy it or not.” News Editor Ed Carson said a key focus for investors will be Oracle’s cloud business, which has struggled against Amazon (AMZN), Microsoft (MSFT) and Google (GOOGL).

“It’s took forever for this company to show any kind of revenue growth,” Carson said. “It just seemed like couldn’t quite get big enough for cloud, so there are interesting things here.”

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Oracle stock is trading flat, last down a fraction as the trading session draws to a close.

Oracle Stock: Numbers To Watch

For the May-ending quarter, analysts project Oracle’s adjusted earnings will come in 1% lower than a year earlier, at $1.65 per share. Sales are seen rising 5.5% to $14.6 billion, according to FactSet.

The quarter marks the end of Oracle’s fiscal 2024.

Oracle projected roughly 5% sales growth for the fiscal fourth quarter following its previous earnings report in March.

Slumping Software Stocks

Oracle’s earnings come as software stocks are broadly struggling. A list of companies that includes Salesforce (CRM), Workday (WDAY)and database competitor MongoDB (MDB)suffered steep slides late last month after earnings reports that disappointed.

“Sentiment in software remains negative with broad-based weakness across front and back office apps (CRM/WDAY calling out tough macro),” Jefferies analyst Brent Thill wrote to clients Tuesday, ahead of Oracle’s report.

Thill, who holds a buy call on Oracle, noted that trends are better for cloud infrastructure, with both Amazon (AMZN) and Microsoft (MSFT) posting strong cloud results for their March quarters.

Thill wrote in a client note Tuesday that investors will be listening for commentary related to AI. There will also be a focus on Oracle’s fiscal year guidance for 2025, Thill wrote.

Oracle typically provides guidance on a call with analysts following its report.

On average, analysts expect Oracle sales to grow 8.5% to $57.8 billion for its next fiscal year, which ends with May 2025, according to FactSet.

Oracle Stock: Technical Ratings

Shares for Oracle have gained 20% overall this year, outpacing a 12% gain for the S&P 500. Oracle stock gapped up after reporting better-than-expected fiscal third quarter earnings in March.

Heading into its fourth quarter  report, Oracle stock formed a cup pattern, with a potential buy point at 132.77, according to MarketSurge.

Oracle stock was trading flat at 124.37 in recent action on the stock market today. Shares have gained 18%  this year and 15%  over the past 12 months.

Coming into the report, Oracle stock had an IBD Composite Rating of 79 out of a best possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.

Further, Oracle’s IBD Relative Strength Rating was 62 out of 99.

Follow Ryan Deffenbaugh on X, formerly Twitter, at @ryanddeff for more stories on data social media, e-commerce and data software stocks. IBD editor Benjamin Pimentel contributed to this report.

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