Investing.com -- Shares in Oracle (NYSE:ORCL) spiked in early U.S. trading on Tuesday after the computer technology group unveiled a forecast for revenue growth in its 2025 fiscal year (FY25) that topped estimates, in a sign of solid demand for its artificial intelligence cloud services.
The firm also said it had struck two new partnerships with ChatGPT-maker OpenAI and Google (NASDAQ:GOOGL) Cloud in a bid to extend the reach of its AI infrastructure.
Oracle, which has already spent heavily on chips from AI-darling Nvidia (NASDAQ:NVDA), is banking on ratcheting up its cloud business to counter stiff competition from rivals like Microsoft (NASDAQ:MSFT)'s Azure unit and Amazon (NASDAQ:AMZN) Web Services. Growth at Azure, in particular, has been boosted by Microsoft's backing of OpenAI.
Speaking to analysts in a post-earnings call, Chief Executive Safra Catz said "strong cloud demand" is expected to drive a "double-digit" uptick in sales in its current financial year. Analysts had forecast FY25 sales increase of 9%, up from 6% in Oracle's fiscal 2024.
First-quarter revenue is seen expanding by 5% to 7%. Analysts had projected 7.6%, Reuters reported.
"I also expect that each successive quarter should grow faster than the previous quarter as OCI capacity increases to meet demand," she added, referring to Oracle Cloud Infrastructure, a set of the company's cloud offerings.
"[O]ur current momentum will continue as our pipeline is growing even faster than bookings and our win rates are going higher as well."
For its fiscal fourth quarter, Oracle reported adjusted per-share earnings of $1.63 on revenue of $14.29 billion, missing Wall Street expectations for $1.65 on revenue of $14.6 billion. Remaining performance obligations, a key gauge of booked revenue, climbed by 44% compared to a year ago to $98 billion.
Yasin Ebrahim contributed to this report.