Investing.com — Shares of computer technology group Oracle (NYSE:) surged in U.S. pre-market trading on Tuesday after the company issued guidance for fiscal year 2025 (FY25) revenue growth that beat expectations, a sign of robust demand for the company's artificial intelligence cloud services.
The company also announced new partnerships with OpenAI, the creators of ChatGPT, and Google (NASDAQ:) Cloud to expand the reach of its AI infrastructure.
Oracle, already a big investor in chips from AI darling Nvidia (NASDAQ:), is focusing on shoring up its cloud business to face stiff competition from rivals such as Microsoft's (NASDAQ:) Azure division and Amazon's (NASDAQ:) Web services, with Azure's growth in particular fueled by Microsoft's backing of OpenAI.
Chief Executive Officer Safra Catz said on an analyst call after the earnings release that he expects “strong cloud demand” to lead to “double-digit” revenue growth this quarter. Analysts expect revenue to grow 9% in fiscal 2025, faster than Oracle's 6% increase in fiscal 2024.
First-quarter revenue is now expected to grow 5-7 percent, compared with analysts' expectations of a 7.6 percent increase, according to Reuters.
“We expect each quarter to grow faster than the previous quarter as OCI capacity increases to meet demand,” she added, referring to the company's cloud service, Oracle Cloud Infrastructure.
“[O]Our pipeline is growing faster than bookings and our book rates are increasing, so our current momentum is set to continue.”
Oracle reported fourth-quarter adjusted earnings per share of $1.63 on revenue of $14.29 billion, below Wall Street expectations of $1.65 per share on revenue of $14.6 billion. Remaining performance obligations, a key measure of recorded revenue, rose 44% year over year to $98 billion.
Yasin Ebrahim contributed to this report.
