Oracle Stock Jumps On Earnings Beat, AI Demand For Cloud Business

Database software giant Oracle (ORCL) on Monday posted better-than-expected quarterly earnings, with sales that hit the mark expected by analysts. Oracle stock jumped as the company said artificial intelligence is boosting demand for its cloud-computing business.

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Oracle reported Monday that it earned an adjusted $1.41 per share on sales of $13.28 billion for it February-ending quarter. On average, analysts projected the Austin, Texas-based company would post adjusted earnings of $1.38 per share on sales of $13.28 billion, according to FactSet.

Adjusted earnings increased 16% year over year while sales increased 7% for the company’s fiscal 2024 third quarter.

On the stock market today, Oracle stock is up more than 9% at 125.05 in after-hours action.

Cloud Backlog Grows

In a news release, Oracle Chief Executive Safra Catz touted a growing backlog for the company’s cloud-related services. The firm’s remaining performance obligations grew 29% in the quarter, totaling more than $80 billion in backlogged work. Catz said that is an all-time record for the company.

Oracle cloud infrastructure revenue increased 49% year over year to $1.9 billion for the February quarter, the company said. That marked a stabilization for the business. Sales grew 52% year over year in its November quarter, 66% in the firm’s August quarter and 76% in the May quarter.

The cloud infrastructure business competes against Amazon Web Services and Microsoft Azure to rent computing power and storage to enterprises. Analysts see the offering as a potential growth driver for Oracle as companies adopt generative AI tools, which require massive data and computing power. But Oracle’s stock took a hit late last year as sales growth for the cloud infrastructure business slowed in back-to-back quarters.

But the company said demand is strong. Catz touted “large new cloud infrastructure” contracts added by Oracle during the most recent quarter as proof.

“We expect to continue receiving large…