Oracle shares surge premarket after Q3 results beat estimates
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Investing.com — Oracle shares surged in premarket U.S. trading on Tuesday after clocking stronger-than-expected quarterly earnings thanks to increased demand for its AI offerings.
Profit per-share excluding items jumped by 16% in its fiscal third quarter to $1.41, topping Bloomberg consensus estimates of $1.38.
Remaining performance obligations, a gauge of booked revenue, climbed by 29% to more than $80 billion — a performance that analysts described as “stellar” and “very strong” in notes to clients.
In a statement, Chief Executive Safra Catz said the firm expects to “continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply — despite the fact we are opening new and expanding existing cloud datacenters very, very rapidly.”
Cloud capacity seems to be catching up with the rollout of new data centers, analysts at BMO Capital Markets said, adding that they now expect revenue growth to be solid throughout Oracle (NYSE:ORCL)’s upcoming 2025 financial year.
Analysts at JPMorgan also argued that this bullish view “underwrite[s] the logic that backlog must convert to revenue over time.” Oracle now expects revenue growth to be in the range of 4% to 6% in its current quarter.
Meanwhile, the company revealed that it will make a joint announcement with Nvidia (NASDAQ:NVDA) this week and mentioned the AI darling multiple times in a post-results call with analysts. Nvidia makes AI-optimized chips that Oracle’s cloud service customers can use.
Gains in Oracle spilled over into other tech heavyweights after markets closed on Monday, in a sign of the influence the enthusiasm over AI has had over stock gains in recent months. Nvidia rose 2.0%, while Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc (NASDAQ:GOOGL) both added 0.6% by 04:06 ET.
