Yesterday during the aftermarket hours of the American session, Oracle unveiled its second quarter earnings results and albeit slightly missing its EPS and Revenue targets, its rambunctious forward outlook sent its stock price more than 30% higher.
Oracle’s reported total revenue for the quarter was $14.9bn, recording a modest 12% increase on year-on- year basis, as cloud revenue rose by 28% and the adjusted EPS figure was $1.47, a cent below markets’ expectations.
A surge in multi-cloud database revenue stemming from its collaborators, Amazon, Google and Microsoft, that use its servers saw an impeccable 1529% increase, lifting the bar higher for the quarters to come and showcasing blatantly that AI server demand is currently extra piping hot.
The eye-popping aspect of the report, however, was the announcement from the company’s CEO Safra Catz, who noted that there is revenue yet to be recognized from contracts signed in Q1, which roughly amounts to $450 bn, signalling superb demand for its Oracle cloud infrastructure which is especially driven by heightened AI workloads.
Partnerships with AI companies, including collaborations with OpenAI and the integration of advanced AI models into Oracle cloud services, are significant drivers its current growth trajectory and as the AI power rally ravages on, lofty targets are expected to become easier to grab.
To deal with this surge in demand, Oracle plans to launch an AI Database service in October to extend AI model execution within its cloud infrastructure.
The prosperously bullish outlook from the tech giant lifted the global tech stocks across Europe and Japan and will most likely contribute positively to the extension of the unbeaten six-day rally in US equities, later on at today’s market open.
Technical Analysis
ORCL Chart – Oracle goes parabolic after extravagant earnings outlook projections
Resistance: 330 (R1), 370 (R2), 420 (R3)
Support: 260 (S1), 220 (S2), 195 (S3)