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Oracle Shares Surge 9% on Google, OpenAI Deals Despite Q4 Earnings Miss

Jun 11, 2024, 08:26 PM

Oracle reported its fiscal fourth-quarter earnings, revealing a miss in both revenue and adjusted EPS. The company posted revenue of $14.29 billion, falling short of the estimated $14.55 billion, and an adjusted EPS of $1.63, below the expected $1.65. Despite these misses, Oracle's shares surged in after-hours trading, driven by significant new partnerships and strong future guidance. Oracle announced a multicloud partnership with Google Cloud, enabling the integration of Oracle Cloud Infrastructure with Google Cloud services. Additionally, Oracle secured a major deal with Microsoft-backed OpenAI to provide AI training capabilities. The company reported a 44% increase in Total Remaining Performance Obligations (RPO) to $98 billion, largely driven by AI-related contracts. Oracle's cloud infrastructure revenue also showed strong growth, with cloud IaaS revenue up 42% year-over-year to $2 billion. CEO Safra Catz highlighted that Oracle signed the largest sales contracts in its history during Q3 and Q4, driven by the demand for training AI large language models. Oracle's stock rose approximately 9% in extended trading, reflecting investor optimism about its future prospects in the cloud and AI sectors. The stock was up 10% in after-hours trading, and the company is guiding F'25 revenues above street estimates. Safra guided Cloud ex CERN up 23%, which was in-line with expectations.