The company is up 50% in 2024 and, according to analysts, the conditions are in place for its growth to continue.
Oracle ‘s share price rise can be explained by the company’s performance, which exceeded expectations, especially in the last quarter. However, analysts expect this growth to continue at least until 2026.
Ironically, Oracle is benefiting from having missed the opportunity to build its own cloud services business when AWS and its peers seized the opportunity more than a decade ago, according to the Wall Street Journal.
Unexpected benefits for Oracle
AWS, Microsoft and Google are choosing Oracle , because of its neutrality, to run the data centers they use to train the large language models that power artificial intelligence chatbots , the Journal reported.
Unfortunately for Oracle , once language models are trained, they don’t need to be retrained frequently. Unless the company can repurpose its data centers to answer user queries, known as inferences, the company’s growth could slow.
Oracle beats expectations in its latest results
Oracle beat expectations and raised its guidance for the August quarter. It also announced it will offer database services to cloud infrastructure market leader Amazon Web Services , according to CNBC.
Before the earnings release, Oracle shares were trading at about $140, up 34% for the year compared with the S&P 500 ’s 15% gain . Shares subsequently rose nearly 12%, hitting an all-time high of about $157 on Sept. 10.
Key figures
- Fiscal Q1 2025 revenue: $13.31 billion, up 8% and $80 million above London Stock Exchange Group expectations.
- Fiscal Q1 2025 adjusted earnings per share: $1.39, seven cents above LSEG estimates .
- Fiscal first quarter 2025 net income: $2.93 billion, an increase of 21% from the same quarter last year.
- Revenue growth in fiscal Q2 2025: 8% to 10%, according to Oracle CEO Safra Catz .
- Second quarter fiscal 2025 adjusted earnings per share: between $1.45 and $1.49, in line with analyst expectations.
Oracle’s growth engine
Oracle ‘s biggest growth came from its cloud services and licensing support business, which generated $10.52 billion in revenue, up 10% from a year ago and $50 million more than the StreetAccount consensus estimate , according to CNBC.
The most impressive growth came from Oracle ‘s cloud infrastructure , which rose 45% to $2.2 billion. An acceleration compared to the 42% increase in the previous quarter, CNBC reported.
Cloud infrastructure sales jumped 49%, 52% and 66% over the previous quarters as Oracle won cloud computing contracts from AI- focused startups , Investor’s Business Daily noted.
Oracle is experiencing «tremendous demand» from customers wanting to use multiple cloud providers, Larry Ellison said in a statement.
Can Oracle sustain this growth?
Analysts seem bullish on Oracle stock . One reason is the 53% growth in already signed employment contracts, known as outstanding performance obligations, which amount to $99 billion.
«RPO growth shows strong momentum for Oracle Cloud and the AI story,» Barclays analyst Ramo Lenschow said in a note to clients highlighted by IBD.
Increased customer engagements with Oracle could accelerate the transition of more on-premise workloads to the cloud, wrote Kirk Materne, an analyst at Evercore ISI.
If Oracle continues to beat expectations and raise its projections, its stock could continue to grow in the coming years.
