Oracle (ORCL) stock jumped nearly 12% out of the gate Wednesday after the software giant announced artificial intelligence (AI) partnerships with OpenAI and Alphabet's (GOOGL) Google, which helped offset a top- and bottom-line miss for its fiscal fourth quarter.
In the three months ended May 31, Oracle's revenue increased 3.3% year-over-year to $14.3 billion, driven by a 9.2% rise in its Cloud Services & License Support segment to $10.2 billion. The company said earnings per share (EPS) declined 2.4% to $1.63 from the year-ago period.
The results were less than encouraging and came in below analysts' estimates. According to CNBC, Wall Street was anticipating revenue of $14.55 billion and earnings of $1.65 per share.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, the double miss was overshadowed by comments from Oracle CEO Safra Catz, who said she expects "strong AI demand" to fuel "double-digit revenue growth this fiscal year." Additionally, in two separate press releases, Oracle disclosed partnerships with Open AI and Google Cloud.
"In Q3 and Q4, Oracle signed the largest sales contracts in our history – driven by enormous demand for training AI large language models in the Oracle Cloud," Catz said in a statement. "In Q4 alone, Oracle signed over 30 AI sales contracts totaling more than $12.5 billion – including one with Open AI to train ChatGPT in the Oracle Cloud."
The deal with OpenAI will extend Microsoft's (MSFT) Azure platform to Oracle Cloud Infrastructure (OCI). This will give OpenAI additional capacity, Oracle said.
"The race to build the world's greatest large language model is on, and it is fueling unlimited demand for Oracle's Gen2 AI infrastructure," said Larry Ellison, chief technology officer and chairman of Oracle. "Leaders like OpenAI are choosing OCI because it is the world's fastest and most cost-effective AI infrastructure."
Meanwhile, the partnership with Alphabet will bring Oracle's database to Google Cloud later this year. The move will allow customers to combine Oracle and Google Cloud technologies to accelerate their application migrations and modernization without facing data transfer charges.
"Customers want the flexibility to use multiple clouds," Ellison said in a statement. "To meet this growing demand, Google and Oracle are seamlessly connecting Google Cloud services with the very latest Oracle Database technology. By putting Oracle Cloud Infrastructure hardware in Google Cloud datacenters, customers can benefit from the best possible database and network performance."
Is Oracle stock a buy, sell or hold?
"Oracle is one of the world's largest and most profitable software companies," says UBS Global Research analyst Karl Keirstead, who adds that the company's earnings report shows "the AI narrative is powerful."
Keirstead has a Buy rating on the tech stock and lifted his price target to $160 from $150 after earnings.
The UBS analyst finds himself in good company with his bullish outlook toward the blue chip stock, too. According to S&P Global Market Intelligence, the consensus analyst target price for ORCL stock is $143.92, representing implied upside of about nearly 5% to current levels. Additionally, the consensus recommendation is Buy.
Related Content
-
Stocks Can't Hold Meta, Microsoft Gains: Stock Market TodayThe main indexes all opened higher Thursday on impressive Big Tech earnings, but momentum faded into the close.
-
Retirement Health Care Costs Are On the Rise: What You Need to KnowA 65-year-old retiree will face significantly higher lifetime health care costs than they would have a year ago, even with Medicare. Here are the surprising totals.
-
Stocks Can't Hold Meta, Microsoft Gains: Stock Market Today
The main indexes all opened higher Thursday on impressive Big Tech earnings, but momentum faded into the close.
-
Three Ways to Find Deals in Your Investments This YearLooking for ways to save because of tariffs? Don't forget to look for deals in your investments. Here are three expert tips for making a little extra this year.
-
How to Invest for a Fall Interest Rate Cut by the FedA lot can happen between now and then, but the probability the Fed cuts interest rates before the end of the year is better than 85%.
-
You Don't Have to Be Wealthy to Need a Wealth ManagerNavigating complex financial decisions is hard on your own, no matter how much money you have. A wealth manager can provide comprehensive financial planning, investment management, risk management and more.
-
Despite Tariffs, These Investment Experts Are Bullish on European EquitiesEuropean equities were one of the better-performing investments during the first half of 2025. They could be a good long-term prospect for U.S. investors needing to diversify, according to these investment managers.
-
Stocks Are Up and Down on Fed Day: Stock Market TodayIn another sign of changing times, JPMorgan has partnered with Coinbase to enable cryptocurrency purchases with credit cards.
-
What Federal Interest Rates Mean for Your Grocery BillThe relationship between grocery prices and the Federal Reserve has plenty of back-and-forth. Understand how they interplay.
-
5 Undervalued Stocks to Buy NowThere are plenty of high-quality undervalued stocks to buy right now, you just need to know where to look. Here, we highlight five of our top picks.
