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  • Writer's pictureRealFacts Editorial Team

Oracle Surges on Partnerships with Google and OpenAI

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After the closing bell on Tuesday, Oracle (ORCL), a leading company in the software market, announced its latest quarterly earnings. They reported adjusted earnings of $1.63 per share on revenue totaling $14.3 billion. Analysts had anticipated the company to deliver adjusted earnings of $1.65 per share with revenues of $14.56 billion. In comparison, during the same fiscal fourth quarter last year, Oracle achieved earnings of $1.67 per share and generated $13.8 billion in revenue. Despite the slight earnings miss, the company gained as much as 11% in after-hours trading, largely due to news of a cloud deal with Google and OpenAI.

During the company’s analyst call, Oracle CEO Safra Catz informed analysts that the company expects sales growth of 6% to 8% for the upcoming quarter, which aligns with analysts' predictions of 7.5% growth for the period ending in August. Additionally, Catz revealed that the company is forecasting double-digit revenue growth for fiscal 2025, surpassing analysts' expectations. Oracle expects revenue growth to accelerate throughout the year as it expands its AI-related data center capacity. Catz highlighted that Oracle secured over 30 AI-related sales contracts worth $12.5 billion in its fiscal fourth quarter alone, including a significant agreement with OpenAI to train ChatGPT using Oracle Cloud.

Analysts from various firms have been commenting on these surprising new developments. Raimo Lenschow, Barclays analyst, noted, “True, Q4 revenue missed due to license weakness, but we think the strong RPO growth (44% YoY), double-digit revenue growth guidance for FY25 (8.3% consensus), and new partnerships with Google Cloud Platform and Azure​/​OpenAI are more relevant.” Additionally, Evercore ISI analyst, Kirk Materne, wrote, "The announcement that OpenAI will also be using Oracle's infrastructure is a key win in terms of Oracle's credibility as an infrastructure platform in an AI world." With these new partnerships in place, investors should monitor how Oracle leverages AI to grow its revenues and earnings further.


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