Oracle shares jump as revenue climbs on AI demand

Oracle on Tuesday said its revenue in the recently ended quarter soared more than expected as demand for services boosted by artificial intelligence outpaced supply.

Oracle reported $17.2 billion in total revenue for the quarter, an increase of 22 percent from the same period a year earlier.

Oracle’s cloud computing unit brought in $8.9 billion, about 44 percent more money than in the same quarter last year, according to earnings figures.

Oracle shares jumped more than 9 percent in after-market trading.

“The demand for cloud computing for AI training and inferencing continues to grow faster than supply,” Oracle said in the earnings report.

“Furthermore, some of the largest consumers of AI Cloud capacity have recently strengthened their financial positions quite substantially.”

Those dynamics should enable Oracle to easily meet or even exceed its revenue forecast for this fiscal year, according to the company.

The tech firm specialising in cloud services and applications for businesses repeated its plan to borrow as much as $50 billion this year as it invests heavily in AI.

Oracle’s strong revenue should help calm “AI buildout jitters” among investors worried that huge amounts of money tech firms are pouring into AI won’t pay off, said Wedbush analyst Dan Ives.

“Oracle remains a bedrock for the AI Revolution,” Ives said in a note to investors.

“We believe this is just the start of AI monetization for Oracle.”

Oracle noted in the earnings report that AI for writing computer code has gotten so capable that the company is making product teams smaller, but no layoffs were announced.

“This new AI Code Generation technology is enabling us to build more software in less time with fewer people,” Oracle said.

The earnings release came amid reports that Oracle and OpenAI have abandoned plans to expand a flagship data centre in Texas that was touted as part of a Stargate Project announced at the White House early last year.