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Oracle shares jumped following an upbeat forecast on Wednesday when it said its pipeline of cloud computing contracts would more than double next year.
Shares in the $500bn database company rose nearly 8 per cent in after-hours trading in New York as the tech company reported fiscal fourth-quarter revenue rose 11 per cent to $15.9bn, above analysts’ expectation of $15.6bn.
Chief executive Safra Catz said the company’s cloud infrastructure business was expected to grow more than 70 per cent in the next fiscal year, while orders would more than double from $138bn in the same period.
Catz said: “Oracle is well on its way to being not only the world’s largest cloud application company — but also one of the world’s largest cloud infrastructure companies.”
The Austin, Texas-based company was slow to enter the cloud computing market but has experienced a sharp increase in demand for data centre infrastructure, up 52 per cent in its most recent quarter, as companies seek to run artificial intelligence workloads.
Earlier this year the company became a partner in OpenAI and SoftBank’s $500bn Stargate project. It has also signed deals with Elon Musk’s xAI and Meta.
It is also is expected to spend roughly $40bn on Nvidia’s high-performance computer chips to power OpenAI’s first US Stargate project in Abilene, Texas, the Financial Times reported last month.
The company started to provide computing capacity to OpenAI last year after the start-up’s primary backer, Microsoft, suffered constraints.
Yet investors are wary that Oracle carries significant debt and continues to trade at a higher price-to-earnings ratio than other technology companies, including rival cloud players Amazon, Google and Microsoft.
The scale of the company’s investments are dwarfed by other hyperscalers. But capital expenditure rose to $9bn in the quarter, more than double analyst expectations of $4bn.
Oracle is also likely to play a role in a deal to spin off TikTok’s US arm from China’s ByteDance. The US administration has set a June 19 deadline for a deal, with the database giant in line to secure the app’s data — which it already hosts on its servers — and take a small equity stake alongside pre-existing US investors.
Catz and Ellison are allies of US President Donald Trump, who has extended the deadline for a deal three times since retaking office.