Oracle (NYSE:ORCL) stock is trending on social media and across headlines this morning after reporting weaker-than-expected financial results. However, positive comments about Oracle’s artificial intelligence (AI) related business and upbeat guidance have investors excited.
Alongside quarterly results, Oracle disclosed new cloud infrastructure deals with Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and OpenAI. Now, ORCL stock is advancing more than 10% as of this writing.
Oracle’s Quarterly Results Miss Expectations
Oracle reported fiscal fourth-quarter adjusted EPS of $1.63 per share versus analysts’ average estimate of $1.65 per share. The company also generated sales of $14.29 billion, slightly below the estimate for $14.55 billion.
What’s more, the company’s top line only rose 3% versus the same period a year earlier. On the other hand, operating income jumped 13% year-over-year (YOY). Cloud infrastructure revenue soared to $2 billion as well, up 42% YOY.
Finally, the company reported that its “remaining performance obligations” had increased 44% YOY to $98 billion. The firm expects its top line to rise at least 10% during its current fiscal year.
New Partnerships
In addition to the results, Oracle disclosed that its database will be featured on Alphabet’s Google Cloud. In another deal that could positively move the needle for Oracle and ORCL stock, the firm also announced that OpenAI would utilize its cloud infrastructure to “provide additional capacity.” Oracle has become known as a good provider of cloud infrastructure for tech startups, Bloomberg noted.
Chairman Larry Ellison pointed out that another partnership with Microsoft (NASDAQ:MSFT) signed late last year would “turbocharge” Oracle’s cloud database growth.” Likewise, Oracle CEO Safra Catz noted that there is “enormous demand for training AI large language models in the Oracle Cloud.”
Microsoft has invested billions of dollars in OpenAI, which operates the popular ChatGPT chatbot.
The Price Action of ORCL Stock
Shares of ORCL stock have advanced 18% in the last month. What’s more, shares of the company are up more than 30% so far this year.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
