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Oracle Stock Price Surges Before Market Opens As Company Exceeds Expectations With Q3 Earnings

Image Source: Sundry Photography / Shutterstock

Oracle’s (ORCL) stock saw a significant rise in premarket trading in the U.S. on Tuesday after reporting stronger-than-anticipated quarterly earnings driven by increased demand for its AI products.

Earnings per share, excluding certain items, jumped 16% in the fiscal third quarter to $1.41, surpassing Bloomberg’s estimated $1.38.

The remaining performance obligations, an indicator of future revenue, surged 29% to over $80 billion, prompting analysts to praise the performance as outstanding and robust.

CEO Safra Catz expressed confidence in the company’s future, foreseeing continued large contracts for cloud infrastructure due to high demand for their Gen2 AI infrastructure. Despite rapid expansion of cloud data centers, demand continues to outpace supply.

Analysts at BMO Capital Markets believe that Oracle’s cloud capacity is aligning well with the opening of new data centers, forecasting strong revenue growth in the company’s fiscal year 2025.

JPMorgan analysts also shared an optimistic view, emphasizing the importance of converting the backlog into revenue over time. Oracle expects revenue growth between 4% and 6% in the current quarter.

Furthermore, Oracle announced a partnership with Nvidia (NVDA) this week, highlighting their joint efforts in AI technology. Oracle’s cloud customers using Nvidia’s AI-optimized chips symbolize the strategic relationship between the two companies.

The positive trend in Oracle’s stock extended to other tech giants after the Monday market close, demonstrating the significant impact of AI excitement on stock prices recently. Nvidia saw a 2.0% increase, while Microsoft Corporation (MSFT) and Alphabet Inc (GOOGL) both rose by 0.6% as of 04:06 ET.

Image Source: Sundry Photography / Shutterstock

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