Oracle – Impressively strong quarterly results. A buy?

Oracle (NYSE:ORCL) was once again able to impress in the last quarter with strong cloud growth. The multi-cloud strategy is paying off.
 
Cloud Infrastructure revenue rose by an impressive 45% to USD 2.2 billion. Cloud services are now Oracle's largest business area and continue to drive both growth and profit margins. At USD 13.307 billion, total revenue was slightly above expectations. Earnings per share exceeded forecasts by around 5% at $1.39. Free cash flow rose by 22% to a remarkable $5.124 billion. This consolidates Oracle's position among the leading technology companies.
 
New partnership with Amazon
 
Oracle announced a closer collaboration with Amazon (NASDAQ:AMZN) Web Services (AWS). In the future, Oracle Cloud Infrastructure will also be accessible via AWS. This multi-cloud strategy will enable customers to use Oracle databases and technologies not only on AWS, but also via Microsoft (NASDAQ:MSFT) Azure and Google (NASDAQ:GOOGL) Cloud. Oracle sees this as an important growth factor, particularly for the database sector.
 
‘Oracle operates or is building 162 cloud data centres worldwide,’ said Larry Ellison, Chairman and CTO of Oracle. ’Our largest data centre has a capacity of 800 megawatts and will contain a large number of NVIDIA (NASDAQ:NVDA) GPU clusters to train massive AI models. In the past quarter, 42 new cloud GPU contracts were signed, worth $3 billion. Soon, our customers will be able to use the latest Oracle database technology in the cloud of every major provider.’
 
Revenue generated by actual use of Oracle Cloud Infrastructure increased by an impressive 56%. Oracle plans to continue to invest significantly in data centres and high-performance NVIDIA GPU clusters to meet the growing demand for artificial intelligence.
 
Outlook
 
Oracle is planning double-digit revenue growth for the 2025/26 financial year. The cloud business is expected to grow by 23 to 25%. Group-wide revenue growth of 7 to 9% is expected in the coming quarter. Due to high demand, investments are even expected to double this year.
 
And the stock also acknowledged the company's figures and outlook with a strong increase in after-hours trading. We believe this is a sustainable increase and not just a flash in the pan. Anyone who is not yet invested has missed a great opportunity.
 
We already prepared our customers for an upcoming relevant bottom on 2 August 2024:
 

 
The stock entered the purple box we had forecast exactly and reversed sharply higher. Now, of course, it has been given a boost by the strong quarterly results.
 

 
What happens next? We think that the stock can continue to move up overall. However, another pullback is to be expected shortly, which can probably be used very well for a purchase. We will keep an eye on this and publish corresponding analyses on our website so that our customers can prepare themselves optimally for the next buying opportunity.
 
You can get more free analysis on our channel on YouTube. You can access all analysis on our website by clicking on the link above next to my profile picture.
 
Disclaimer/Risk warning:
The information provided here is for informational purposes only and does not constitute a recommendation to buy or sell. It should not be understood as an explicit or implicit assurance of a particular price development of the financial instruments mentioned or as a call to action. The purchase of securities involves risks that may lead to the total loss of the capital invested. The information provided does not replace expert investment advice tailored to individual needs. No liability or guarantee is assumed, either explicitly or implicitly, for the timeliness, accuracy, appropriateness or completeness of the information provided, nor for any financial losses. These are expressly not financial analyses, but journalistic texts. Readers who make investment decisions or carry out transactions based on the information provided here do so entirely at their own risk. The authors may hold securities of the companies/securities/shares discussed at the time of publication and therefore a conflict of interest may exist.