BENGALURU – Oracle said on March 11 it is set to make a joint announcement with chip giant Nvidia, even as it beat estimates for quarterly profit, riding on the generative artificial intelligence (AI) demand boom.
Its shares were up nearly 14 per cent in extended trading.
The late-day rally added more than US$40 billion (S$53.2 billion) to Oracle’s stock market value.
The 46-year-old database giant has been trying to reinvent itself as a cloud computing provider by offering services that are cheaper than those of rivals such as Amazon.com.
It has tried to drum up demand for its subscription plans through partnerships with rival Microsoft and AI chip leader Nvidia, which makes chips that power supercomputers and can be used by customers of Oracle’s cloud service.
“We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply – despite the fact that we are opening new and expanding existing cloud data centres very, very rapidly,” Oracle chief executive Safra Catz said.
Oracle executives mentioned Nvidia at least three times during their call with analysts and said a joint announcement will be made in the coming week.
Excluding items, the company posted profit of US$1.41 per share for the third quarter, up 16 per cent, above LSEG estimates of US$1.38 per share.
“While results for the quarter were merely in line with expectations... investors are excited about the new business Oracle won during the quarter,” said D.A. Davidson research analyst Gil Luria.
The most popular measure of booked revenue, remaining performance obligations, was up 29 per cent compared with a year earlier, which bodes well for the upcoming results, Mr Luria said.
However, revenue of US$13.28 billion for the three months ended Feb 29 was below analysts’ average estimate of US$13.3 billion.
For the current quarter, Oracle forecast revenue growth to be in the range of 4 per cent to 6 per cent, which was below analysts’ average estimate of about 6.5 per cent, according to LSEG data. REUTERS
