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Oracle expects double-digit revenue growth amidst AI demand

Written by Wed 12 Jun 2024

Oracle has announced that it expects revenue for fiscal 2025 to grow in double digits, surpassing analysts’ estimates. 

This forecast, driven by strong demand for its artificial intelligence (AI) powered cloud services, sent the company’s shares up 9% after the bell.

Oracle noted in Q3 and Q4, the company signed the largest sales contracts in its history, driven by ‘enormous’ demand for training AI large language models in the Oracle Cloud.

CEO at Oracle, Safra Catz, said she expects continued strong AI demand to push Oracle sales and RPO even higher, and result in double-digit revenue growth this fiscal year. 

“I also expect that each successive quarter should grow faster than the previous quarter, as Oracle Cloud Infrastructure (OCI) capacity begins to catch up with demand,” said Safra Catz, CEO at Oracle.

Catz added in Q4 alone, Oracle signed over 30 AI sales contracts totalling more than 412.5 billion, including one with OpenAI to train ChatGPT in the Oracle Cloud.

Oracle Reports Slight Underperformance

In Q4, Oracle’s total revenue grew 3% to £11.1 billion ($14.29 billion), missing the London Stock Exchange Group’s (LSEG) of £11.3 billion ($14.55 billion).

Oracle also failed to meet analysts’ expectations of 9% total revenue growth for fiscal 2024, instead reporting 6%. The company has predicted Q1 revenue to grow  between 5% and 7% as analysts expect a 7.6% rise.

The total value of Oracle’s remaining performance obligations amounted to £76.3 billion ($98 billion) in the fourth quarter. This figure represents a significant increase of 44% compared to the same period a year ago.

In March, Oracle stocks rose more than 13%, reaching an all-time high. this surge was attributed to investor confidence in the company’s strategic advancements toward capturing a portion of the cloud computing market, bolstered by its collaboration with industry leader NVIDIA.

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Written by Wed 12 Jun 2024

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