4 Key Takeaways From Oracle’s Earnings Call

After Oracle (ORCL) reported fiscal fourth-quarter earnings that missed estimates and announced large cloud infrastructure deals with Microsoft (MSFT), OpenAI, and Alphabet’s (GOOGL) Google Cloud, company executives joined the company’s earnings call Tuesday to discuss the new partnerships, how artificial intelligence (AI) could drive growth for Oracle, and more.

Cloud Infrastructure Deal With Microsoft and OpenAI for AI Training

Oracle announced a partnership with Microsoft and ChatGPT maker OpenAI to extend Azure Al to Oracle Cloud Infrastructure (OCI) to provide additional capacity for OpenAl.

The company reported that it already has 11 databases at Azure sites and has more locations with Microsoft “coming online soon.”

Oracle Chief Technology Officer (CTO) Larry Ellison said the company is building “a very, very large data center” with “lots of Nvidia chips” for AI model training, noting that large data centers are necessary for complex AI training, especially as models’ capabilities expand.

Ellison said alongside Microsoft and OpenAI, customers using Oracle’s cloud infrastructure and data centers include Nvidia (NVDA), Google, and Elon Musk’s xAI, among others.

Google Interconnecting Cloud With Oracle

The company also announced a multi-cloud partnership with Google. OCI and Google Cloud network interconnect were available on Tuesday in 10 regions, Oracle CEO Safra Catz told investors.

Oracle databases at Google Cloud are going live in September, giving customers direct access to Oracle database services running on OCI deployed in Google Cloud. Catz said the company will have 12 Oracle databases at Google Cloud sites live this year.

Amazon’s (AMZN) AWS was not in the mix of Oracle’s large cloud customers, but Ellison said the company “would love to do the same thing [as it’s doing with Microsoft and Google] with AWS.”

AI Era To Drive Incremental Growth

Catz underlined that Oracle expects revenue to continue to grow, fueled by the data center and cloud capacity required by advancing AI models.

Catz said she “expect[s] continued strong cloud demand to push Oracle Sales and RPO even higher and result in double-digit revenue growth this fiscal year,” adding that “each successive quarter should grow faster than the previous quarter as OCI capacity increases to meet demand.”

The CEO said the “current momentum will continue as our pipeline is growing even faster than bookings.” She noted that fiscal 2025 cloud infrastructure services will grow faster than they did in fiscal 2024.

Meeting Customers’ Needs With Comprehensive Services

Oracle said that part of what sets it apart from competitors is that it can offer customers comprehensive data center services.

“Whatever the deployment model is, [Oracle’s customers] don’t have to compromise,” Catz said, adding “some of our competitors may offer some level of sovereignty or some level of disconnected but they don’t actually have all the services.”

She said that “the reason we’ve been so successful is whether it’s disconnected or sovereign, the customer always gets everything—all services, not just some services, and they get to deploy it any way they want.”

The CEO also highlighted that sovereignty “may be very critical” for government and some customers, which could set the company apart as organizations look for sovereign solutions to ensure data security.

Oracle shares were up around 9.4% at $135.55 in extended trading as of about 7:15 p.m. ET Tuesday following the company’s earnings call.