Oracle predicts strong gains ahead

The Magnificent Seven have a new challenger for the biggest winner of the AI trade: dark horse candidate Oracle.

While a relatively late entrant to cloud computing, 47-year-old Oracle jumped over 11% after stellar earnings revealed how deeply the tech company has successfully integrated artificial intelligence into its cloud services.

For its first-quarter results, Oracle reported:

• Earnings of $1.39 per share, beating forecasts of $1.32.
• Revenue of $13.3 billion, compared to expectations of $13.23, and an 8% increase from a year ago.
• Revenue from cloud products jumped 21% in the first quarter, to $5.6 billion.
• The company expects growth in the neighborhood of 8% to 10% for the current quarter, CEO Safra Catz told investors on the firm’s earnings call, and is still seeing booming demand.
• Oracle unveiled plans to build a data center that will use over a gigawatt of power and a mere three modular nuclear reactors.

Investors were also particularly excited to hear that Oracle announced a partnership with its former rival, Amazon Web Services, to expand its database services. The collaboration is expected to be a boon to both software giants, who will team up to recruit customers and expand AI capabilities.

Today, Oracle showed investors it can reinvent itself for the AI-age—a move that other legacy tech behemoths, like Intel, have failed to pull off successfully. Ten analysts have raised their price targets for Oracle since Monday.

Overall, Oracle is up 50% this year, and could run even higher. Morgan Stanley analyst Keith Weiss pointed out in a note that investors see Oracle’s cloud infrastructure as especially viable given the shortage of AI hardware.—LB