Quick overview

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Oracle recently reported a significant increase in reservations for the last quarter, largely due to a major agreement with OpenAI, leading to a sharp rise in its stock shares.

Oracle stated that its remaining performance obligation—a key measure of bookings posted an increase from approximately $138 billion at the end of the prior quarter to $455 billion at the end of the fiscal first quarter.

Chief Executive Officer Safra Catz remarked, “In Q1, we signed four multi-billion-dollar contracts with three different customers.” She emphasized that it was an extraordinary quarter, highlighting a growing demand for Oracle Cloud Infrastructure. Following a closing price of $241.51, the shares surged by 14 percent in after-hours trading. As of the close on Tuesday, the company’s stock had risen 45% so far this year, outperforming the S&P 500, which gained four times less.

Cloud infrastructure revenue grew by 55% to $3.03 billion, surpassing analysts’ expectations of a 53% increase. Adjusted earnings per share were reported at $1.47, slightly below the average estimate of $1.48. Though Oracle is primarily known for its database software, it has recently made significant strides in the competitive cloud computing market. Earlier this summer, Oracle struck an unprecedented deal with OpenAI to provide 4 x 5 gigawatts of data center capacity—equivalent to the energy consumed by millions of American homes. Other notable cloud users include Nvidia Corp. and ByteDance’s TikTok.