Oracle shares are rising on deals with Microsoft, OpenAI and Google, despite weak earnings

Key takeaways

Oracle reported fourth-quarter earnings and revenues missed analysts’ expectations, but announced big cloud infrastructure deals with Microsoft, OpenAI and Alphabet’s Google.
The company’s revenues increased compared to the same period last year but fell short of analyst expectations, while the company’s profits decreased compared to the same period last year and exceeded estimates.
Oracle announced a partnership with Microsoft and OpenAI to extend Microsoft’s Azure Al cloud platform to Oracle Cloud Infrastructure (OCI), as well as an agreement with Google Cloud.

Oracle (ORCL) reported fourth-quarter revenue and earnings that missed analyst estimates, but announced big cloud infrastructure deals with Microsoft (MSFT), OpenAI and Alphabet’s (GOOGL) Google Cloud for artificial intelligence (AI) data centers, sending shares Oracle up more than 9% in extended trading on Tuesday.

According to estimates from Visible Alpha, Oracle reported revenue of $14.29 billion for the fiscal fourth quarter of 2024, up 3% from the year-ago period but below analyst expectations.

Net income was $3.14 billion, or $1.11 per share, compared with $3.32 billion, or $1.19 per share, in the same period a year earlier and was below analyst forecasts.

	4th quarter of fiscal year 24	Analyst estimates for Q4 FY24	4th quarter of fiscal year 23
Income	$14.29 billion	$14.57 billion	$13.84 billion
Diluted earnings per share	$1.11	$1.17	$1.19
Net income	$3.14 billion	$3.31 billion	$3.32 billion

Oracle announced a partnership with Microsoft and ChatGPT developer OpenAI to extend the Microsoft Azure Al cloud platform to Oracle Cloud Infrastructure (OCI) to provide additional performance for OpenAl.

“We are delighted to be working with Microsoft and Oracle. OCI will expand the Azure platform and enable OpenAI to continue to scale,” said OpenAI CEO Sam Altman.

“In the third and fourth quarters, Oracle signed the largest sales agreements in its history – driven by tremendous demand for training large artificial intelligence language models on Oracle Cloud,” said Oracle CEO Safra Catz, adding that she “expects grow faster than the previous quarter – as OCI capacity begins to catch up with demand.”

“In the fourth quarter alone, Oracle signed more than 30 AI sales agreements totaling more than $12.5 billion, including one for Open AI to train ChatGPT on Oracle Cloud,” Catz said.

The company also announced that it “recently signed an agreement with Google to connect our clouds and will initially build 12 OCI data centers on Google Cloud. We expect the Oracle database to be available on Google Cloud in September this year.”

Oracle shares jumped more than 9% to $135.25 as of 4:50 p.m. EST in extended trading Tuesday after the announcement.