Oracle Inc (NYSE: ORCL) is up 10% in extended hours even though it came in below Street estimates for its fiscal fourth quarter.
Why is Oracle stock up in after-hours?
Investors are cheering because cloud segment of the computer technology company remained strong, bringing in $5.3 billion in revenue – up 20% on a year-over-year basis.ORCL is pushing to the upside also because it announced new deals with Google and OpenAI on Tuesday. Safra Catz – its chief executive said in a press release:
I expect that each successive quarter should grow faster than the previous quarter—as OCI capacity begins to catch up with demand. In Q4 alone, Oracle signed over 30 AI sales contracts totaling more than $12.5 billion—including one with Open AI to train ChatGPT in the Oracle Cloud.
The New York listed firm announced 40 cents a share of quarterly cash dividend on Tuesday. Oracle stock is currently up some 20% versus its year-to-date low.
Notable figures in Oracle Q4 earnings release
Oracle ended the fourth quarter with $98 billion of total remaining performance obligations – up 44%. CEO Catz also said on Tuesday:
In Q3 and Q4, Oracle signed the largest sales contracts in our history—driven by enormous demand for training AI LLMs in Oracle Cloud. I expect continued strong AI demand to push Oracle sales and RPO even higher—and result in double-digit revenue growth this fiscal year.
ORCL teams up with Google and OpenAI
Oracle Inc is bringing its database to Google Cloud (expected in September 2024).OpenAI has also opted for its public cloud to extend MSFT artificial intelligence infrastructure. Larry Ellison – chairman of ORCL said in a press release on Tuesday:
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. Now customers can run any and every version of the Oracle database in both the Azure and the Oracle Clouds.
Ahead of the earnings release, Morgan Stanley analyst Keith Weiss reiterated his “equal-weight” rating on Oracle stock. His $155 price objective, however, signals potential for a 15% upside on top of after-hours gain on Tuesday. Weiss expects ORCL shares to climb on the back of momentum in large and long-term deals.More By This Author:AMC Entertainment Announced $3.0 Ticket
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