Oracle surges 15% to hit record high after Q1 cloud bookings swell on AI boom, stock up 33% YTD

Oracle Corp. shares reached an all-time high following the company's announcement of profits and bookings that exceeded expectations, indicating that the growing demand for artificial intelligence is driving growth in its cloud computing sector.

On Tuesday morning in New York, the shares surged up to 15 per cent, reaching a record intraday high of $160.52. Oracle has been one of the top-performing large software stocks this year, having climbed 33 per cent by the close of Monday.

Oracle reported Monday that earnings, excluding certain items, were $1.39 per share. Revenue for the period ending August 31 rose 7 per cent to $13.3 billion. Analysts had forecasted an average profit of $1.33 per share with sales also expected to be $13.3 billion.

“As cloud services became Oracle’s largest business, both our operating income and earnings per share growth accelerated,” Chief Executive Officer Safra Catz said in the statement.

The Austin-based company, renowned for its database software, is concentrating on growing its cloud infrastructure business, which involves renting computing power and storage to rival Amazon.com Inc., Microsoft Corp., and Alphabet Inc.’s Google. Oracle’s cloud has gained a strong reputation for handling generative artificial intelligence workloads, with notable customers such as Reka and Elon Musk’s xAI.

On Monday, Oracle revealed a new agreement to offer its flagship database on the Amazon Web Services cloud. This follows similar partnerships with Microsoft and Google and is viewed by analysts as a move to modernize Oracle’s database operations.

For the fiscal first quarter, cloud revenue rose by 21 per cent to $5.6 billion, aligning with expectations. Of this total, $2.2 billion was generated from computing and storage rentals. The remaining performance obligation, which reflects booked sales, stood at $99 billion.

“Oracle has 162 cloud data centers in operation and under construction around the world,” Chairman Larry Ellison said in the statement.