Oracle Climbs to 4th in WSB Rankings Amid Stock Slump Despite Strong Q1 Performance

Stock SpotlightTuesday, Sep 10, 2024 7:02 am ET

1min read

Oracle has climbed to the 4th position on the latest WSB ranking, up by 8 spots from the previous day. However, Oracle (ORCL) shares fell by 1.35%, extending a two-day decline, totaling a 1.91% drop over the period.

In recent financial performances, Oracle reported its fiscal Q1 earnings, which exceeded market expectations, driven largely by a surge in demand for cloud infrastructure tied to artificial intelligence. Oracle's Q1 revenue rose by 7% year-over-year to $13.3 billion, aligning with analysts’ expectations. Non-GAAP operating income increased by 14% to $5.7 billion, beating the average analyst forecast of $5.59 billion, and earnings per share reached $1.39, surpassing the expected $1.33.

Oracle CEO Safra Catz highlighted the growth potential, stating, "As cloud services become Oracle's largest business area, our operating income and earnings per share are accelerating." This underscores Oracle's robust position in the competitive landscape against Amazon, Microsoft, and Google by focusing on expanding cloud infrastructure capabilities.

Oracle's prowess in generative AI workloads was noted, with significant customers like Reka and Elon Musk's xAI. For the first fiscal quarter, cloud revenue soared by 21% to $5.6 billion, which met market projections. This includes $2.2 billion from computing and storage rental services.

In after-hours trading, Oracle's stock price surged approximately 9%, closing at $139.89 in New York. Oracle has been one of the top-performing major software stocks this year, with a year-to-date gain of 33% by the close of the market.

Further, Oracle recently announced a strategic partnership with Amazon Web Services (AWS) to launch the Oracle Database@AWS cloud service product. This offering allows users to access Oracle Exadata database services and Oracle Autonomous Database on dedicated infrastructure hosted on the AWS platform. This move aims to simplify the migration and deployment of enterprise workloads to the cloud, enhancing agility, flexibility, and security.

Larry Ellison, Oracle’s Chairman and CTO, emphasized, "We see a strong demand from customers wanting to use multi-cloud environments. To cater to this demand, Amazon and Oracle are seamlessly integrating AWS services with Oracle's latest database technologies, including the Autonomous Database." This integration within AWS data centers is expected to provide optimal performance for both database and network, offering improved database service accessibility and usability for Oracle while expanding AWS's cloud service product line.

The Oracle Database@AWS cloud service product is anticipated to be available by December 2024.

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