In the fourth quarter, Oracle reported $98 billion in remaining performance obligations (RPO), representing revenue expected from future contracts. CEO Safra Catz attributed this to large sales contracts driven by demand for Oracle’s cloud services for training artificial intelligence models, as stated in a release.
Oracle also announced partnerships with Microsoft and OpenAI to increase computing capacity and bring its database to Google Cloud.
While Citi analysts acknowledged Oracle’s sluggish revenue but noted significant RPO bookings growth, UBS analysts highlighted Oracle’s $18 billion sequential backlog growth. They emphasized the narrative behind the results as a key factor.
UBS reiterated its buy rating on Oracle stock, while Morgan Stanley analysts noted the near-term AI build-out’s positive impact on shares. They also raised questions about the nature of Oracle’s contracts and the implications on gross margins.
In conclusion, the analysts highlighted the growing importance of Oracle in the GenAI infrastructure development, particularly with impressive bookings and partnership with OpenAI.
— CNBC’s Michael Bloom and Jordan Novet contributed to this report.
