Oracle jumps to all time high as results were driven by AI adoption

Oracle has announced its fiscal third-quarter results for 2024, which exceeded analysts' expectations. The company is among the beneficiaries of the artificial intelligence trend. Here are the detailed results:

Earnings per share were $1.41, with revenues reaching $13.28 billion.

Cloud services and support revenues increased by 12% to $9.96 billion.

Cloud license and on-premise license, hardware, and services revenues were $1.25 billion, $754 million, and $1.3 billion, respectively.

Short-term deferred revenues amounted to $8.9 billion.

Analysts had expected earnings per share of $1.38 on revenues of $13.29 billion.

Oracle CEO Safra Catz stated that the strong results were a result of signing large cloud infrastructure contracts. The growth in total remaining performance obligations for Oracle reached a record $80 billion. The company expects to continue signing significant contracts to reserve cloud infrastructure capacity due to high demand for their Gen2 AI infrastructure, despite rapidly expanding their cloud data centers.

Analysts agree that Oracle will continue to benefit from AI-related spending, particularly in the cloud. Oracle Cloud Infrastructure revenues increased by 49% in constant currency, indicating sustained demand and execution.

Looking ahead to the fourth quarter, Oracle expects total revenues, including the Cerner acquisition, to grow between 4% and 6%, in line with expectations. Cloud revenues are projected to grow between 22% and 24% year-over-year. Earnings per share are expected to be between $1.62 and $1.66, excluding one-time items, aligning with Wall Street's forecast.

Oracle also hinted at expanding its collaboration with Nvidia to further drive AI adoption in enterprises, with "exciting joint announcements" expected soon.

It is worth noting that Oracle's stock price has been trading sideways since the summer of 2023. However, it is currently closing the gap with the Nasdaq index and surpassing previous historical highs. If it closes above $127.4 per share, new record levels will be reached. The company's stock is up over 10% today. Source: xStation5.