Oracle Stock Jumps 14% as Large Customer Contracts Boost Earnings—Key Level to Watch

Shares in Oracle (ORCL) jumped more than 14% in after-hours trading Monday after the enterprise computing solutions provider reported better-than-expected quarterly earnings and issued a bottom-line forecast for the current quarter that matched expectations amid several large customer signups.

The Austin, Texas-based company posted fiscal third-quarter adjusted earnings of $1.41 per share, surpassing Wall Street expectations of $1.37 a share. Revenue in the period of $13.28 billion climbed 7% from last year’s corresponding quarter and was in line with the consensus view.

The company’s largest business, its cloud services and license support segment, saw revenue in the quarter jump 12% to $9.96 billion, benefiting from robust demand for the company’s artificial intelligence (AI) servers. Analysts had expected the unit to report sales of $9.94 billion.

Looking ahead, the maker of a variety of enterprise cloud infrastructure applications projects current-quarter earnings of between $1.62 and $1.66 a share, with the midpoint of that range matching the $1.64 per share consensus view. Oracle said it expects revenue in the period to grow between 4% and 6% from the $13.8 billion sales figure reported during the same quarter last year.

Oracle CEO Safra Catz said the company closed several large new cloud infrastructure contracts during the third quarter, adding that there were more in the pipeline.

“We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply—despite the fact we are opening new and expanding existing cloud datacenters very, very rapidly,” Catz said in the company’s quarterly earnings report.

Oracle shares have oscillated within a channel since late October. More recently, the price has traded toward the top of the pattern, hugging the 200-day moving average. Tuesday’s expected earnings-driven breakout looks likely to propel the price to a record high above a prior double top pattern that formed between June and September last year. However, it’s worth keeping an eye on this key technical level around $127.50 which may flip from an area or resistance into a floor of support if the stock continues to move higher.

Oracle shares gained 14.4% to $130.60 in extended trading Monday.

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As of the date this article was written, the author does not own any of the above securities.