Oracle (NYSE: $ORCL) released its first quarter fiscal 2025 results on Monday, September 9, after markets closed to a positive market reception. Here is a deep dive into the results.
Oracle Beats Estimates in Q1 Results
Oracle, a leading software and technology company, reported an EPS of $1.39, beating forecasts of $1.32. Meanwhile, revenue was up 8% year over year to $13.31 billion, beating estimates of $13.23 billion.
Segment Performance
Oracle reported $5.6 billion in cloud revenue, a 22% year over year increase, while the cloud infrastructure segment generated $2.2 billion in revenue, a 45% increase year over year. Meanwhile, cloud application revenue was up 10% year over year to $3.5 billion, Fusion Cloud ERP revenue grew 17% year over year to $.0.9 billion, while the NetSuite Cloud ERP revenue grew 20% year over year to $0.9 billion.
Oracle reported a 53% increase in total remaining performance obligations to $99 billion.
Oracle’s AI Strategy Fuels Growth
Oracle has adopted an AI strategy that has helped fuel growth for the company in the first quarter of fiscal 2025. It has embedded Ai capabilities across its cloud infrastructure business, enterprise applications, and databases.
The company has steadily increased its AI solutions, with a huge focus on Machine Learning (ML), natural language processing, and computer vision. Their advancements offer customers intelligent, efficient, and automated solutions. Oracle can leverage its AI capabilities to help grow its cloud business.
During an earnings call, CEO Safra Catz said, “I will say that demand is still outstripping supply. But I can live with that.”
Oracle’s Future Plans
Oracle is working on a gigawatt-power data center, which will be fueled by three modular nuclear reactors, according to Larry Ellison, cofounder, and chairman of the company.
According to Ellison, Oracle could operate up to 2000 data centers in future, up from the current 162 that it operates. However, he noted that not all of them would take up massive amounts of electricity. He noted that they are working on a 150-kilowatt design, with plans to go as low as 50 kilowatts.
The company also revealed it was setting up a new cloud region that will be based in Saudi Arabia and noted that its database software would be available via Google’s public cloud.
Oracle Partners With Amazon Web Services
On Monday, Oracle revealed that it was partnering with Amazon Web Services to make its database services accessible on dedicated hardware.
Oracle (ORCL) Stock Performance
Following the stellar Q1 results, ORCL stock jumped 12.24% in the early morning trading session to $156.99 per share as of 09:45 AM EDT. Over the past 12 months, the stock is up 23.91%, while year to date, it is up a whopping 50.88%.
Analysts forecast a moderate buy for the stock, with a wide range of price forecasts that include a high of $175 and a low of $105. They forecast an average price of $151.91, which is a 3.27% downside based on today’s early morning price. Following the positive Q1 results, analysts will likely revise their price targets upward.
Should You Invest In Oracle Amid The AI-Fueled Surge?
Oracle has seen a surge in revenue, driven by its cloud segment, as the company integrates AI. It has a massive $99 billion in remaining performance obligations, and the company is currently increasing a steady rise in momentum in revenue growth.
Based on its current performance and likely revenue growth in the near term, adding ORCL to your portfolio could potentially lead to positive gains in the medium term.
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