Oracle surges to record high on cloud bookings, profit beat

Oracle Corp. shares hit a record high after the software giant reported profit and bookings that topped estimates, signaling that artificial intelligence demand continues to boost its cloud computing business.

Earnings, excluding some items, were $1.39 a share, Oracle said Monday in a statement. Revenue increased 7% to $13.3 billion in the period ended Aug. 31. Analysts, on average, estimated profit of $1.33 a share on sales of $13.3 billion.

“As cloud services became Oracle’s largest business, both our operating income and earnings per share growth accelerated,” Chief Executive Officer Safra Catz said in the statement.

The Austin-based company, known for its database software, is focused on expanding the cloud infrastructure business of renting computer power and storage to compete with Amazon.com Inc., Microsoft Corp. and Alphabet Inc.’s Google. Oracle’s cloud has developed a reputation for success with generative artificial intelligence workloads – the company touted customers including Reka and Elon Musk’s xAI.

Oracle also announced a new agreement Monday to make its namesake database available on the Amazon Web Services cloud. Similar deals had been inked previously with Microsoft and Google, and are seen by analysts as a way to modernize Oracle’s database business.

The deal with AWS is “a good thing for Oracle’s database business, which is still largely on-premise at this point,” Anurag Rana, an analyst at Bloomberg Intelligence, said in an interview on Bloomberg Television.

Fiscal first-quarter cloud revenue increased 21% to $5.6 billion, meeting estimates. Of that, $2.2 billion came from renting computing and storage. Remaining performance obligation – a measure of booked sales – was $99 billion.

On a conference call after the results were released, Catz said the higher performance obligation was due to several large deals booked in the quarter. Investors are likely taking the results as a sign of more-sustained growth for Oracle, said Alex Zukin, an analyst at Wolfe Research, in an interview on CNBC.

The shares gained as much as 15% Tuesday morning in New York, hitting a record intraday high of $160.52. Oracle has been one the best-performing large software stocks this year, rising 33% through Monday’s close.

Catz said revenue will jump double digits in the fiscal year ending in May. Analysts, on average, estimated a 9.4% increase. Cloud infrastructure revenue will grow quicker than in the prior fiscal year, she added.

Demand for cloud infrastructure continued to outpace supply in the quarter, Catz said on the call. Management has said it’s rapidly constructing new data centers to keep up with the need for servers to power AI.

Capital expenditures, which are watched as a metric of that investment, were $2.3 billion in the quarter. Analysts estimated $3.04 billion. In the fiscal year ending in May 2025, capital expenditures will be about double what they were in 2024, Catz said.

“Oracle has 162 cloud data centers in operation and under construction around the world,” Chairman Larry Ellison said in the statement.