Oracle shares jump in premarket trading on bumper AI-fueled forecast

Investing.com -- Shares in Oracle (NYSE:ORCL ) rose by more than 6% in premarket US trading after the database software group unveiled a revenue outlook for its 2026 fiscal year that topped analysts' expectations.

Speaking to analysts as part of its Oracle CloudWorld event in Las Vegas, the firm said it now expects to post revenue of $66 billion during the period, up from a prior guidance of $65 billion. Analysts had seen the number at $64.5 billion, according to LSEG data cited by media outlets.

Oracle also forecast that it would report $104 billion in revenue by 2029, as well as annual earnings growth of more than 20%. Chief Executive Safra Catz said achieving these targets should be "not a problem [...] at all," CNBC reported.

"While these numbers appear lofty, Oracle management outlined a clear path for achievement, through continued cloud conversion of the support base [...], tailwinds from the database business through a multi-cloud approach [...], new innovations, and adding new customers," analysts at Wolfe Research said in a note to clients.

Analysts at UBS noted, however, that the enthusiasm was offset by a "disappointing push-out" of Oracle's 45% operating margin target from 2026 to 2029, adding it is a "reminder of how expensive [...] the investment in a new [graphics processing unit] infrastructure is turning out to be."

The company has been boosted by a spike in demand for cloud computing from the rapidly-growing artificial intelligence industry, although it does compete on this front with tech giants like Alphabet (NASDAQ:GOOGL )'s Google, Microsoft (NASDAQ:MSFT ) and Amazon (NASDAQ:AMZN ).

Earlier this week, the group reported better-than-expected fiscal first-quarter results, driven by strong demand for its cloud business.

Texas-based Oracle also said it had signed a strategic partnership with Amazon Web Services that will allow customers to access Oracle Autonomous Database and Oracle Exadata Database Service within AWS.

The announcement comes after Oracle previously said it had struck new partnerships with Microsoft-backed ChatGPT-maker OpenAI and Google Cloud in a bid to extend the reach of its AI infrastructure.

Oracle shares are trading up around 53% as of Thursday’s close.

Ambar Warrick contributed to this report.

 

 

Source: Investing.com