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Oracle reported a massive jump in bookings of future artificial intelligence business for its cloud infrastructure unit on Tuesday, sending shares in the US database company up 25 per cent to a record high in after-hours trading.
The company’s remaining performance obligations — business it has booked that will feed through into future revenue — leapt to $455bn, up from only $138bn three months ago.
Safra Catz, chief executive, called it an “astonishing quarter” that had included Oracle signing “four multibillion-dollar contracts with three different customers” in the latest three months. Wall Street had been primed for a leap in bookings following the disclosure of a new $30bn-a-year contract the company signed in July, but had not expected the overall backlog to grow as fast.
The company, which was late to pivot to the cloud, has reaped the rewards of a groundswell in demand for data centre infrastructure from AI start-ups and other major technology companies. Earlier this year it signed a deal to partner with OpenAI and SoftBank on the $500bn Stargate project.
The after-hours surge in Oracle’s share price, which added $135bn to its stock market value, follows a gain of roughly 43 per cent in the year-to-date ahead of Tuesday’s earnings release, propelling founder Larry Ellison up the Bloomberg Billionaire Index, below only Elon Musk with an estimated net worth in excess of $290bn.
For the latest quarter Oracle reported a 12 per cent gain in revenue, to $14.9bn, slightly below the $15bn Wall Street had been expecting. Adjusted net income rose 8 per cent to $4.3bn, higher than analysts’ expectations.
The earnings came more than a month after rival tech companies including Amazon, Alphabet, Meta and Microsoft. Collectively, these four companies are on course to spend more than $350bn this year on data centres and other AI infrastructure and more than $400bn in 2026.
Oracle has previously committed to investing more than $25bn in the current fiscal year, up from $21bn last year but well below its rivals.
In July, it emerged OpenAI had agreed to lease 4.5 gigawatts of computing power from Oracle in a deal worth about $30bn a year. The move will entail Oracle developing multiple data centres across the US to satisfy the start-up’s computer-processing demands, having already reached a deal to supply a 1.2GW site in Abilene, Texas.
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