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Oracle Reports Strong Bookings and Cloud Growth
Oracle Corp. has reported better-than-expected bookings, indicating robust momentum in its bid to compete in the cloud computing sector against larger rivals. The company's shares surged approximately 9% in extended trading following the announcement.
Strong Performance in Future Contracted Sales
In its fiscal fourth quarter, Oracle's total remaining performance obligations—a key measure of future contracted sales—rose by 44% to reach $98 billion. This figure significantly surpassed analysts' average estimate of $73.9 billion. These obligations reflect the company's commitment to future sales and provide a positive outlook for sustained growth.
Expansion in Cloud Infrastructure
Oracle, traditionally known for its database software, is keenly focused on ramping up its cloud infrastructure business to effectively compete with tech behemoths like Amazon, Microsoft, and Google's Alphabet. Although this segment represents a smaller portion of Oracle's total sales, it is viewed by investors as a critical driver of the company's future growth.
Notably, Oracle has experienced a significant uptick in demand for training AI large language models within its cloud environment. This growing interest has resulted in the largest sales contracts in the company's history over the past two quarters, according to CEO Safra Catz.
Strategic Partnerships Boosting Cloud Capabilities
Oracle has also been proactive in forging strategic partnerships to enhance its cloud offerings. Recently, the company entered into an agreement to make its database available on Google's cloud infrastructure. This follows a similar deal announced in late 2023 with Microsoft, which is expected to accelerate Oracle's cloud database growth significantly, according to the company's chairman, Larry Ellison.
Stock Performance
Following these encouraging developments, Oracle's shares reached a high of $136.40 in late trading, up from a closing price of $123.88 in New York. The stock has seen an 18% increase this year, reaching a record high in March.
Overall, Oracle's latest performance highlights its successful efforts and strategic initiatives to reinforce its position in the competitive cloud computing market, setting a strong foundation for future growth.
