ORACLE on Tuesday (Jun 11) forecast its revenue for fiscal 2025 to grow in double digits, in a sign of strong demand for its artificial intelligence (AI) powered cloud services as clients ramp up spending, sending the company’s shares up 8 per cent after the bell.
The company also announced a partnership with ChatGPT-maker OpenAI and Google Cloud to extend its own cloud infrastructure to customers.
“I expect that each successive quarter should grow faster than the previous quarter – as OCI (Oracle Cloud Infrastructure) capacity begins to catch up with demand,” CEO Safra Catz said.
“In Q4 alone, Oracle signed over 30 AI sales contracts totalling more than US$12.5 billion, including one with OpenAI to train ChatGPT in Oracle Cloud.”
The AI investments play a crucial role in Oracle’s efforts to catch up with cloud giants such as Microsoft, which is seeing rapid growth of its own Azure cloud due to its tie-up with OpenAI.
Oracle has spent billions of US dollars on hardware from Nvidia and is among its major customers in line to receive its new flagship B200 chip.
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The cloud services provider reported remaining performance obligations – the most popular measure of booked revenue – at US$98 billion for the fourth quarter, up 44 per cent from a year ago.
“In Q3 and Q4, Oracle signed the largest sales contracts in our history, driven by enormous demand for training AI large language models in Oracle Cloud,” Catz said.
The company’s cloud revenue came in at US$5.3 billion, up 20 per cent from a year ago.
But its total revenue of US$14.29 billion for the quarter missed analysts’ average estimate of US$14.55 billion, according to LSEG data.
The company posted adjusted earnings per share of US$1.63 per share, compared with estimates of US$1.65 per share. REUTERS
