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Oracle earnings miss, stock jumps on Google Cloud, OpenAI deals

Oracle (ORCL) reported fourth quarter results that missed Wall Street estimates.

Adjusted earnings of $1.63 per share fell short of the expected $1.65. Adjusted revenue of $14.29 billion missed the estimate of $14.57 billion. However, the company announced a new partnership with Google Cloud (GOOG, GOOGL) and that OpenAI has selected its Oracle Cloud Infrastructure "to extend" Microsoft's Azure AI platform (MSFT).

Yahoo Finance's Julie Hyman and Josh Lipton break down the tech giant's quarterly results.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

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This post was written by Stephanie Mikulich.

Video transcript

Oracle earnings.

They are just coming out in the past few moments, and we are looking at a miss here for these numbers.

So if you look at the shares, they're actually moving higher.

Interestingly enough, I think if I had to guess that that has to do with a partnership that the company also little known.

So let's talk about that first, OK, Oracle and Google Cloud are announcing a partnership.

It also is involving Open a I, which will be using Oracle Cloud Infrastructure to extend the Microsoft platform.

So it looks like there are multi prongs and multi what they're calling multi clouds as part of that.

So that's on the one side then.

The company is also saying its fourth quarter revenue missed estimates $14.29 billion 14.57 billion dollars is what the analysts had been anticipating.

Earnings per share also missing estimates by two cents a share, the company is declaring quarterly it's quarterly cash dividend of 40 cents a share.

And then there is another area of beat that we should mention.

That's in cloud infrastructure revenue, which is coming in at $2 billion a little bit ahead of estimates.

Yes, fiscal Q four is typically a seasonally strong, a strong one for Oracle.

Heading into the print, there was, I know some chatter.

Some analysts were kind of worried just because of some of what they had seen from other enterprise software makers like Sales Force and Work Day.

But on that on this news here, Larry Ellison is out with a They've been saying Our multi cloud Cooper operation with Microsoft expanded, he says significantly in Q four, as we agreed to work together to support open A I and chat GP T, he goes on to say, As this becomes available, it's going to, in his words, turbocharge our cloud database growth.

Clearly, investors, at least initially, are reacting strongly.

The stock was already up about 20% year to date heading into this print attack and on about 8% initially after hours.

Yeah, and analysts who we've spoken to some of them have said that this is sort of one of those names that while it's not in the big headlines for the hyper scaler, it's one of the companies that is indeed poised to benefit from some of these various generative A I, um, announcements and I should mention the stuff I, I said at the beginning about Oracle's partnerships now with Microsoft and open a I on the one hand and then with Google.

On the other hand, those are are separate announcements.

So it had earnings, and then it came with separate releases talking about these other partnerships.

So again, one of those is that Oracle, Microsoft and Open A I are going to partner to extend the Azure A I platform to Oracle Cloud infrastructure that will give open a I more capacity according to this release.

And then Oracle and Google Cloud Infrastructure are also going to have a partnership.

So it seems like all of this is sort of a it's supercharging these a I capabilities, if in my very layman's terms of what all of this means.

But it also means upside for the stock.

Yes, CO.

So for cats.

And in Q three and Q four, Oracle signed the largest sales contracts.

Our history driven, she says, by enormous demand for training A I at large language models in the Oracle cloud, she says.

In Q four alone, Oracle signed over 30 A. I sales contracts totally more than 12 point 5 billion that, she says, including one with open A I to train chat G BT in the Oracle cloud.

Investors seem plenty excited so far in the after hours.

Yes, they do.

And the stock, by the way, it's It's not quite at a record, but it actually is kind of close to a record.

It was, it was it was at a record back in March, that record was 1 29 24 So we'll see if that I mean it's trading above that right now.