The stock of Oracle (ORCL) is up 31% after the database software maker issued bullish growth projections tied to new cloud computing contracts.
The Austin, Texas-based company’s share price is up even though its latest quarterly financial results were a disappointment, missing Wall Street’s targets on the top and bottom lines.
Oracle announced earnings per share (EPS) of $1.47 U.S., which was below the $1.48 U.S. that had been forecast among analysts.
Revenue in the period totaled $14.93 billion U.S., which was below the $15.04 billion U.S. that was expected on Wall Street. Sales were up 12% from a year earlier.
Despite missing projections, Oracle said that its performance obligations, a measure of contracted revenue that has not yet been recognized, soared 359% to $455 billion U.S.
During the year’s second quarter, privately held OpenAI signed an agreement with Oracle to develop 4.5 gigawatts of U.S. data center capacity.
Alongside large cloud providers such as Microsoft (MSFT), Oracle has been one of the big winners of the artificial intelligence (A.I.) boom.
Oracle’s management team said the company recently signed four multibillion-dollar contracts with three different customers, sending its share price surging higher.
Management also said that cloud rival Google’s (GOOGL) Gemini AI models would become available on Oracle’s cloud infrastructure in coming months.
In October, the company will rollout an Oracle AI Database service that will allow for running A.I. models from OpenAI and other companies atop client data stored in Oracle databases.
In terms of financial guidance, Oracle is forecasting $1.61 U.S. to $1.65 U.S. in earnings, with 14% to 16% revenue growth for the current quarter.
Wall Street was looking for $1.62 U.S. in earnings and $16.21 billion U.S. in sales, which implies 15% growth.
The bullish outlook, which is tied to the red-hot A.I. trend, has Oracle’s stock looking at its best day since the dot-com boom of 1999.
Prior to today’s (Sept. 10) big move higher, Oracle’s stock had risen 45% this year to trade at $241.51 U.S. per share.
