TLDR:
- Oracle’s cloud division shows promising growth prospects
- Oracle Cloud Infrastructure grew 45% to $2.2 billion in revenue last quarter
- Oracle stock is up 59% this year, outperforming the Nasdaq Composite
- Analyst predicts Oracle’s database revenue will benefit from cloud partnerships
- Oracle projects $104 billion in revenue for fiscal year 2029
Oracle, the enterprise software giant, is experiencing significant growth in its cloud division, driven by partnerships with major tech companies and increasing demand for artificial intelligence capabilities.
Recent financial reports and analyst projections paint a picture of a company well-positioned in the competitive cloud computing market.
In its latest quarterly report, Oracle revealed that its Cloud Infrastructure segment grew by 45%, reaching $2.2 billion in revenue. This growth is largely attributed to rising demand for artificial intelligence model training and AI workloads. The company’s overall performance has impressed investors, with Oracle stock up 59% this year, significantly outpacing the Nasdaq Composite’s 21% gain.
Bernstein analyst Mark Moerdler recently reiterated an Outperform rating for Oracle stock, raising the price target to $202. Moerdler noted that Oracle is achieving organic revenue acceleration and strong margins at a time when many software and cloud companies are seeing flat or declining growth.
Oracle’s future looks promising, with the company projecting $104 billion in revenue for fiscal year 2029. This ambitious target is supported by strategic partnerships with industry leaders.
Oracle has secured database partnership deals with Microsoft, Amazon Web Services (AWS), and Google, which are expected to contribute significantly to its database revenue growth.
The company’s recent earnings report and subsequent announcements have been well-received by the market. Oracle shares jumped after the strong earnings results and the announcement of a new database partnership with AWS. This positive momentum continued as the company provided its long-term outlook.
Oracle’s growth story is not limited to its cloud infrastructure. The company is known for its enterprise-grade database, middleware, and application software offerings. While the cloud business is described as the “largest engine of growth,” Oracle’s traditional strengths in database technology continue to play a crucial role in its overall strategy.
Financial analysts are taking note of Oracle’s performance. The company has seen upward revisions in earnings estimates, with eight analysts raising their projections for fiscal 2025 in the last 60 days. The consensus estimate for earnings per share has increased to $6.19, reflecting a year-over-year growth of 11.3%.
Oracle’s top line is also expected to improve, with Wall Street anticipating a 9.4% increase. The company has demonstrated consistent performance, boasting an average earnings surprise of 2.3%. Cash flow metrics are equally impressive, with Oracle generating cash flow growth of 5.4% and expectations of 10.6% expansion in 2025.
These financial indicators have led some analysts to classify Oracle as a strong growth stock. The company’s Growth Style Score of A and VGM Score of B, as rated by Zacks, further support this classification. These scores take into account projected and historical earnings, sales, and cash flow to identify stocks with long-term, sustainable growth potential.
