Shares of Oracle ( ORCL ) are rising after announcing cloud deals with Google ( GOOG , GOOGL ) and OpenAI, despite missing fourth-quarter earnings and revenue.
Yahoo Finance’s Seana Smith and Brad Smith break down the tech giant’s revenue and its position in the AI race.
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This post was written by Melanie Riehl
Video transcript
Oracle shares rise after announcement of cloud deals with Google and Open AI.
But, the company missed profits and revenue in the fourth quarter here.
We’re taking a look at stocks that are moving higher pre-market by around 7% here.
One of the big things that was mentioned, especially during the quarter where they saw the remaining performance obligation that RPO $98 billion was up 18 billion from the third quarter and up 40% 44% year over year.
It really goes back to this deal making that they’re able to do here and the number of people and companies that are relying on this is what they call the OC I Oracle cloud infrastructure here.
And so these are the cloud services, the data centers here and the way they describe it is that human beings don’t run this operating system in the database, autonomous software robots do Larry Ellison saying that on the earnings call and you you actually get a sense of how they think about these data centers and how they think about language learning models.
He went so far as to actually call them more like neural networks if you will, because they’re not just looking at language and swallowing they’re looking through video pictures and they really have to run influential equations on it.
And so, uh it’s, it’s really interesting how this company is thinking about generative AI now and that’s injected into their cloud infrastructure.
Yeah, and how big a driver they see that ultimately being here over the next couple of years, I think that’s what the road is focusing on.
And that was enough here for investors to look at the weakness that oracle presented here in its most recent quarter, even really what it’s seeing here in 2024 and looking ahead to 2025 and how some of these partnerships that were announced with Google, with Microsoft with Open AI, how this is ultimately expected to drive business forward here.
And JP Morgan highlighted that in their notes saying that the guidance here targeting acceleration to double digit growth here was sufficient here to be satisfied down the road.
And, and from our recent conversations that we’ve had and even from the conversations that I was having last week in uh San Francisco at the Bank of America global technology conference.
There was such a focus on spent enterprises and what exactly that would look like.
And, and we talk about the next leg and the next phase or temptation whatever you want to call it of AI, what it will ultimately look like who is best positioned within that space.
And there are a lot of names like an oracle here that were mentioned just in terms of being well positioned at this point in the cycle, in terms of future adoption.
And at the end of the day, now the road is even stronger as to what these partnerships with Google mean, what the partnership with Microsoft, what does that ultimately mean for the demand for their business.
Yes, absolutely.
NVIDIA Microsoft, Google Xa, I open AI CO here and dozens of others stepped up and named names, jump on the earnings call as they were talking about OC here.
So I imagine it’s an acronym.
We’ll hear a lot more if I keep bringing it up or if the company keeps talking about it one way or another.