Oracle Hits Record Cloud Reservations, Breaks Profit

Oracle Corp. shares hit a record high after the software giant reported earnings and orders that beat estimates, indicating that demand for artificial intelligence continues to drive the company’s cloud computing business.

Earnings, excluding certain items, came to $1.39 per share, Oracle said in a statement Monday. Revenue rose 7% to $13.3 billion in the period ended Aug. 31. Analysts, on average, had estimated earnings of $1.33 per share on sales of $13.3 billion.

“As cloud services have become Oracle’s largest business, both our operating income and earnings per share growth have accelerated,” Chief Executive Safra Catz said in a statement.

The Austin-based company, known for its database software, is focused on expanding its cloud infrastructure business of renting compute and storage power to compete with Amazon.com Inc., Microsoft Corp. and Alphabet Inc.’s Google. Oracle’s cloud has built a reputation for success with generative artificial intelligence workloads — the company has boasted of clients including Reka and Elon Musk’s xAI.

Oracle also announced a new deal Monday to host its namesake database on Amazon Web Services’ cloud. Similar deals have been signed with Microsoft and Google before, and analysts see them as a way to modernize Oracle’s database business.

Anurag Rana, an analyst at Bloomberg Intelligence, told Bloomberg Television that the AWS deal “is good for Oracle’s database business, which is still largely on-premises.”

Cloud revenue in the fiscal first quarter rose 21% to $5.6 billion, meeting estimates. Of that, $2.2 billion came from computer and storage rentals. The remaining commitment to perform, a measure of booked sales, was $99 billion.

On a conference call after the earnings were released, Catz said the higher execution commitment was due to several large deals made in the quarter. Investors are likely viewing the results as a sign of more sustainable growth for Oracle, Alex Zukin, an analyst at Wolfe Research, told CNBC.

The company’s shares rose 15% in New York Tuesday morning, hitting a record intraday high of $160.52. Oracle is among the best-performing software companies this year, up 33% through Monday’s close.

Catz said revenue will grow by double digits in the fiscal year ending in May. Analysts, on average, had estimated a 9.4% increase. Cloud infrastructure revenue will grow faster than in the previous fiscal year, she added.

Catz said on the call that demand for cloud infrastructure continued to outpace supply in the quarter. Management said it was rapidly building new data centers to meet demand for servers to power AI.

Capital spending, which is a closely watched measure of that investment, came in at $2.3 billion in the quarter. Analysts had been estimating $3.04 billion. Capital spending in the fiscal year ending in May 2025 will be about twice as high as in 2024, Catz said.

“Oracle has 162 cloud data centers in operation or under construction around the world,” Chief Executive Larry Ellison said in a statement.