Oracle recently released its revenue forecast for fiscal year 2025, which is expected to achieve double-digit growth, far exceeding market expectations, mainly due to strong demand for AI cloud services. The forecast pushed the company's stock price up 9% after the close. At the same time, Oracle also announced cooperation with OpenAI and Google Cloud to further expand its cloud infrastructure. This prediction and cooperation shows that Oracle is actively deploying the AI field and trying to occupy a more favorable position in the cloud computing market competition.
U.S. technology company Oracle on Tuesday forecast double-digit revenue growth through fiscal 2025, beating analysts' expectations and showing strong demand for its AI cloud services, and the company's shares rose after the close. 9%. Oracle also announced partnerships with ChatGPT maker OpenAI and Google Cloud to extend its own cloud infrastructure to clients.
"I expect each quarter to grow faster than the last as the capabilities of Oracle Cloud Infrastructure begin to meet demand," said company CEO Safra Katz. "In the fourth quarter alone, Oracle signed More than 30 AI sales contracts totaling more than $12.5 billion, including one with OpenAI to train ChatGPT in Oracle Cloud.”
AI investments play a crucial role in Oracle's efforts to catch up with cloud giants such as Microsoft. Microsoft's Azure cloud has also achieved rapid growth due to its cooperation with OpenAI. Oracle has also invested billions of dollars in hardware in chip giant Nvidia. The company's total revenue rose 3% in the fourth quarter to $14.29 billion, but fell short of Thomson Reuters LSEG's forecast of $14.55 billion.
"Oracle is doing well as the fourth largest provider in the cloud market, but this business must grow more to help overall growth achieve double-digit growth," said Gil Luria, a research analyst at DA Davidson. Oracle reported total revenue growth of 6% in fiscal 2024, and analysts expect growth of 9% in fiscal 2025. The company expects first-quarter revenue to rise 5% to 7%, while analysts expect 7.6% growth.
"In the third and fourth quarters, Oracle signed the largest sales contracts in our history, driven by significant demand for training AI large language models in Oracle Cloud," Katz said. Remaining performance obligations, i.e., booked revenue The most popular measure, reached $98 billion in the fourth quarter, up 44% from a year ago. The company's adjusted earnings per share were $1.63, compared with analysts' expectations of $1.65.
All in all, Oracle's optimistic forecast and strategic cooperation for AI cloud services demonstrate its ambition in the cloud computing market competition and also reflect the important role of AI technology in promoting the growth of the cloud service market. In the future, Oracle's market performance deserves continued attention.