Financial report falls short of expectations, but Oracle, known as the "Fourth Cloud of the United States", sees a significant rise in stock price after signing a major AI deal with Microsoft, OpenAI, and Google

Despite the financial report falling short of expectations, Oracle continues to secure major AI deals, with an expected double-digit revenue growth by the fiscal year 2025 and a significant surge in stock price after hours.

The post-market financial data released by Oracle on Tuesday showed that in the fourth quarter of the fiscal year 2024, the non-GAAP earnings per share were $1.63, lower than the expected $1.65; the revenue increased by 3% year-on-year to $14.29 billion, below the expected $14.55 billion, and the growth rate also slowed down from the 7% increase in the previous quarter.

During the quarter, Oracle's cloud infrastructure revenue was $2 billion, a 42% year-on-year growth, slightly slower than the 49% growth rate in the previous quarter; cloud services and license support department revenue reached $10.23 billion, a 9% year-on-year growth, slightly below market expectations, with cloud services and on-premise license business revenue declining by 15% to $1.84 billion, falling short of expectations.

Despite the underwhelming performance, Oracle announced partnerships with Microsoft, OpenAI, and Google Cloud on the same day, and the management team is confident in the future performance, expecting double-digit revenue growth by the fiscal year 2025, surpassing analysts' expectations.

Oracle's stock price surged by 11% after hours, currently settling at a 9.38% increase.

Joining Hands with AI Giants, Oracle Secures Major Deals

Oracle's CEO Safra Catz revealed that there is strong demand for AI large-scale cloud models, and in the third and fourth quarters, Oracle signed the largest sales contracts in history:

"In just the fourth quarter, Oracle signed more than 30 AI sales contracts, totaling over $12.5 billion, including a contract with OpenAI for training ChatGPT on Oracle Cloud."

Catz stated: "I expect the growth rate to be faster every quarter than the previous one—because the capacity of Oracle's cloud infrastructure is catching up with demand."

According to media reports citing D.A. Davidson research analyst Gil Luria, in the cloud market, Oracle performs well as the fourth-largest supplier, but this business must grow larger to help achieve double-digit overall growth.

On Tuesday, Oracle announced that it will introduce its database services into Google Cloud in November, allowing users to deploy business in Google and Oracle's cloud data centers without data transfer fees. In addition, Catz expressed willingness to collaborate with Amazon Web Services in a similar manner.

On the same day, Oracle announced a collaboration with Microsoft. Under the agreement, Microsoft will lease Oracle's cloud servers to provide OpenAI with more server capacity, as previously OpenAI only ran on Microsoft's servers OpenAI CEO Ultraman stated in a declaration that this transaction will "enable OpenAI to continue to scale."

This collaboration is built on an agreement announced by Microsoft and Oracle last year, making it easier for customers to move data between the two companies' cloud servers.

Additionally, according to The Information's previous report, as early as May last year, amidst a global GPU shortage, Microsoft and Oracle have been discussing how to share computing power for artificial intelligence workloads