Oracle saw a sharp rise in its shares on Tuesday, gaining more than 10% as its push to integrate AI into cloud services boosted first-quarter results. The company’s rapid investment in AI has enhanced the appeal of its software, helping it close the gap with industry leaders Microsoft and Amazon.
Revenue from Oracle’s cloud products surged 21% to $5.6 billion in the first quarter, while its total revenue of $13.31 billion exceeded expectations. Analysts at Stifel predict Oracle’s revenue will continue to grow, driven by increased AI infrastructure bookings and strategic cloud partnerships.
If current share gains persist, Oracle could add approximately $39 billion to its market value. So far this year, the company’s stock has climbed more than 32%, outperforming both Microsoft and Amazon, which have gained 8% and 15% respectively. Oracle’s stock is currently trading at a forward price-to-earnings ratio of 21.30, lower than Microsoft’s 29.81 and Amazon’s 31.50.
Oracle’s cloud infrastructure, powered by Nvidia hardware, is benefiting from the chipmaker’s industry-leading AI technology. This has further strengthened Oracle’s AI capabilities, making its services a competitive alternative in the market.
The company has also forged partnerships with rival cloud service providers, aiming to simplify data integration for customers across various platforms. Recently, Oracle announced a collaboration with Amazon Web Services, following a similar deal with Google Cloud in June, further positioning it for cloud revenue growth.
Analysts at Bernstein anticipate continued growth for Oracle’s cloud revenue, particularly due to these multi-cloud partnerships with major providers like Azure, Google Cloud, and AWS, which are expected to drive further acceleration in the company’s cloud operations.