Oracle shares rise to a record after Q1, then fall 9%
The software giant projected current quarter revenue below Wall Street forecasts which dented what was otherwise a good set of numbers.
Excluding items, earnings came in at $1.19 per share, compared with estimates of $1.15 on revenues of $12.50 billion. CEO and founder, Larry Ellison, still very much hands on, highlighted that AI is front and centre of opportunity. He announced development companies have signed contracts to purchase more than $4 billion of capacity in Oracle's Gen2 Cloud, a figure that doubled in the last three months.
(Video Transcript)
U.S. software giants
U.S. software giants, established back in the early 1970s by Larry Ellison and continues to be led and led well by Mr. Ellison, stock rose to a record high in the immediate wake of the release of numbers out late yesterday.
Then the stock fell to close down 8.9% after the software giant projected current quarter revenue below forecast. Excluding items, earnings came in at $1.19 per share compared with estimates of $1.15. Revenue for the first quarter stood at $12.5 billion.
Oracle Q2 revenue growth
Now, Oracle forecast fiscal second quarter revenue growth between 5% and 7%. That was lower than the average estimate last time around of 8.2%. So let's take a look at what we've got in terms of the move and put what we saw late yesterday into some sort of context.
This is the long-term picture for Oracle, and it just says it all really for Oracle, which is, as I say, being led by the same man, the founder, since it was established back in the early 1970s. And as I said, it rose to a new intraday record high in yesterday's trade. After a surge in cloud demand during the pandemic, stock is up 55% so far this year.
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Oracle's cloud infrastructure business
The economic environment is more difficult now for Oracle, especially as it has to compete with much larger rivals like Amazon Web Services and Microsoft. However, the development of AI applications is continuing to boost Oracle's cloud infrastructure business.
Larry Ellison highlighting that AI development companies have signed contracts to purchase more than $4 billion of capacity in Oracle's Gen 2 cloud, a figure that doubled in the last three months. So Oracle down on the session, a margin of almost 9% in extent in trade yesterday, but that came after a new all-time intraday record high in the stock to kick off with.
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