Oracle (ORCL) on Tuesday reported fiscal fourth quarter earnings and sales that came in lower than expected for earnings and revenue. But Oracle stock gained as the company touted its AI demand and revealed plans to work with OpenAI and Microsoft (MSFT).
Oracle posted adjusted earnings of of $1.63 per share from sales of $14.3 billion. On average, analysts were expecting the Austin, Texas-based company to post adjusted earnings of $1.65 per share on sales of $14.56 billion.For the same fiscal fourth quarter a year ago, Oracle posted earnings of $1.67 per share and sales of $13.8 billion.
Oracle stock rallied more than 7% after hours.
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Updated 4:20 pm E.T.
Oracle Stock: Upbeat Cloud and AI News
Oracle highlighted positive trends for its cloud infrastructure business, including through a growing partnership with Microsoft that now includes hosting workloads for ChatGPT creator OpenAI.
“Our multicloud cooperation with Microsoft expanded significantly in Q4, as we agreed to work together to support Open AI and ChatGPT—and 11 of the 23 OCI datacenters we are building inside Azure went live,” Larry Ellison, Oracle’s chairman and chief technology officer, said in a statement. “As this Azure/OCI cloud capacity becomes available to the large installed base of Microsoft and Oracle customers, it will turbocharge our cloud database growth.”
Updated 3:45 pm E.T.
Oracle Stock On IBD Live: ‘Worth Watching As Kind Of A Bellwether.’
Oracle was featured on the Tuesday edition of IBD Live.
IBD Live Host Justin Nielsen said Oracle stock is “worth watching as kind of a bellwether, regardless if you’re going to buy it or not.” News Editor Ed Carson said a key focus for investors will be Oracle’s cloud business, which has struggled against Amazon (AMZN), Microsoft (MSFT) and Google (GOOGL).
“It’s took forever for this company to show any kind of revenue growth,” Carson said. “It just seemed like couldn’t quite get big enough for cloud, so there are interesting things here.”
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Oracle stock is trading flat, last down a fraction as the trading session draws to a close.
Oracle Stock: Numbers To Watch
For the May-ending quarter, analysts project Oracle’s adjusted earnings will come in 1% lower than a year earlier, at $1.65 per share. Sales are seen rising 5.5% to $14.6 billion, according to FactSet.
The quarter marks the end of Oracle’s fiscal 2024.
Oracle projected roughly 5% sales growth for the fiscal fourth quarter following its previous earnings report in March.
Slumping Software Stocks
Oracle’s earnings come as software stocks are broadly struggling. A list of companies that includes Salesforce (CRM), Workday (WDAY)and database competitor MongoDB (MDB)suffered steep slides late last month after earnings reports that disappointed.
“Sentiment in software remains negative with broad-based weakness across front and back office apps (CRM/WDAY calling out tough macro),” Jefferies analyst Brent Thill wrote to clients Tuesday, ahead of Oracle’s report.
Thill, who holds a buy call on Oracle, noted that trends are better for cloud infrastructure, with both Amazon (AMZN) and Microsoft (MSFT) posting strong cloud results for their March quarters.
Thill wrote in a client note Tuesday that investors will be listening for commentary related to AI. There will also be a focus on Oracle’s fiscal year guidance for 2025, Thill wrote.
Oracle typically provides guidance on a call with analysts following its report.
On average, analysts expect Oracle sales to grow 8.5% to $57.8 billion for its next fiscal year, which ends with May 2025, according to FactSet.
Oracle Stock: Technical Ratings
Shares for Oracle have gained 20% overall this year, outpacing a 12% gain for the S&P 500. Oracle stock gapped up after reporting better-than-expected fiscal third quarter earnings in March.
Heading into its fourth quarter report, Oracle stock formed a cup pattern, with a potential buy point at 132.77, according to MarketSurge.
Oracle stock was trading flat at 124.37 in recent action on the stock market today. Shares have gained 18% this year and 15% over the past 12 months.
Coming into the report, Oracle stock had an IBD Composite Rating of 79 out of a best possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Oracle’s IBD Relative Strength Rating was 62 out of 99.
Follow Ryan Deffenbaugh on X, formerly Twitter, at @ryanddeff for more stories on data social media, e-commerce and data software stocks. IBD editor Benjamin Pimentel contributed to this report.
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