- Oracle reported strong earnings Monday, sending its stock price soaring 12%.
- The company signed a multi-cloud partnership with Amazon Web Services.
- Is Oracle stock a buy?
Tech giant Oracle saw its stock price rise 12% after it posted strong earnings Monday that beat revenue and earnings estimates.
Investors piled into Oracle (NYSE:ORCL) stock on Tuesday, driving the stock price some 12% higher after the company released quarterly earnings Monday afternoon.
The tech giant, which offers cloud computing software and infrastructure, beat revenue and earnings estimates in the first quarter of its 2025 fiscal year. The company produced $13.3 billion in revenue, up 7% year over year. It topped estimates of $13.2 billion.
Net income jumped 21% year-over-year to $2.93 billion, or $1.03 per share. On an adjusted basis, earnings per share rose 17% year over year to $1.30 per share, beating estimates of $1.32 per share.
Oracle’s stock price rose more than 12% on the day and closed at an all-time high. Is it too late to buy Oracle stock?
Big Boost from AI and Data Centers
Oracle’s largest business, Cloud Services, saw revenue climb 21% to $5.6 billion, fueled by Oracle’s investments in AI, which helped generate revenue at its data centers, where they use NVIDIA (NASDAQ:NVDA) chips for their AI training models.
“Oracle has 162 cloud datacenters in operation and under construction around the world,” Oracle Chairman and CTO Larry Ellison said. “The largest of these datacenters is 800 megawatts and will contain acres of NVIDIA GPU Clusters for training large scale AI models.”
Oracle’s data center business is booming as a result of multi-cloud partnerships it has with Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL), Ellison added. And, as of this week, Oracle has a new multi-cloud agreement.
Strategic Partnership with AWS
Also this week, Oracle announced a strategic partnership with Amazon (NASDAQ:AMZN). The two tech giants will launch the Oracle Database@AWS, which allows customers to access the Oracle database within Amazon Web Services, providing a unified, multiple cloud experience between Oracle and AWS.
“We are seeing huge demand from customers that want to use multiple clouds,” Ellison said. “To meet this demand and give customers the choice and flexibility they want, Amazon and Oracle are seamlessly connecting AWS services with the very latest Oracle Database technology, including the Oracle Autonomous Database. With Oracle Cloud Infrastructure deployed inside of AWS datacenters, we can provide customers with the best possible database and network performance.”
Oracle now has multi-cloud agreements with the big three, Amazon, Microsoft, and Google. On the earnings call, Ellison said this will allow customers to use the Oracle database “anywhere and everywhere.”
The cloud partnerships with AWS and Microsoft and Google will “turbocharge the growth of our database business for years to come,” Ellison said.
Wall Street Analysts Are Bullish
Wall Street analysts were also impressed with Oracle’s earnings report.
Oracle got more than a dozen price target upgrades after it posted earnings Monday afternoon, including a $25 boost from Piper Sandler to $175 per share. That would be a 13% increase over its current $155 per share price.
Piper Sandler analyst Brent Bracelin said his firm is encouraged by Oracle’s broad strength across multiple revenue streams, including its multi-cloud partners.
Oracle is leaning into its plans to grow its data centers as a result of high demand and these strategic partnerships. On the call, Ellison said Oracle expects to have 1,000 to 2,000 data centers around the world over time, filling the burgeoning need for high performance computing.
“A lot of them will be dedicated to individual banks or telecommunications companies or technology companies or what have you, or nation states, sovereign clouds, all of this other stuff,” Ellison said.
Is Oracle Stock a Buy?
Oracle stock is up 50% YTD, and it has a reasonable forward P/E of only 22. It has increased its operating margin to 30%, from 26%, and has about $11 billion in free cash flow.
While Oracle stock just hit a record high, it is still reasonably valued, and should have plenty of room to run over the long term.
It might not be wise to buy at today’s high but look for an opportunity to buy Oracle stock on a dip.