Oracle Stock Is Rising Tuesday: What's Going On?

Oracle Corp ORCL shares are trading higher Tuesday on the heels of the company’s fiscal third-quarter results.

What Happened: Oracle said third-quarter revenue increased 7% year-over-year to $13.3 billion, which missed the consensus estimate of $13.306 billion, according to Benzinga Pro. The company reported quarterly earnings of $1.41 per share, which beat average estimates of $1.38 per share. 

Total remaining performance obligations climbed 29%. Total cloud revenues were up 25%, cloud infrastructure revenues were up 49%, cloud application revenues were up 14%, Fusion cloud revenue was up 18% and NetSuite Cloud ERP revenues were up 20% in the quarter.

"We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply—despite the fact we are opening new and expanding existing cloud datacenters very, very rapidly," said Safra Catz, CEO of Oracle.

"We expect that 43% of our current $80 billion of Remaining Performance Obligations will be recognized as revenue over the next four quarters, and that our Gen2 Cloud Infrastructure business will remain in a hypergrowth phase—up 53% in Q3—for the foreseeable future."

Oracle's board also declared a quarterly cash dividend of 40 cents per share to be paid on April 24 to stockholders of record as of April 10.

On the conference call following the print, Oracle said it expects total revenues including Cerner to grow between 4% and 6%, according to Benzinga Pro. The company also noted that it plans to make some joint announcements with Nvidia Corp NVDA next week. Nvidia’s 2024 GTC Conference is set to kick off on March 18.

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Analyst Changes: Multiple analysts raised price targets on Oracle following the company’s quarterly results.

• Piper Sandler analyst Brent Bracelin maintained Oracle with an Overweight and raised the price target from $122 to $140.

• Barclays analyst Raimo Lenschow maintained Oracle with an Overweight and raised the price target from $140 to $147.

• JPMorgan analyst Mark Murphy maintained Oracle with a Neutral and raised the price target from $100 to $105.

• Jefferies analyst Brent Thill maintained Oracle with a Buy and raised the price target from $145 to $150.

• BofA Securities analyst Brad Sills maintained Oracle with a Neutral and raised the price target from $122 to $144.

• Mizuho analyst Siti Panigrahi maintained Oracle with a Buy and raised the price target from $140 to $160.

• Bernstein analyst Mark Moerdler maintained Oracle with an Outperform and raised the price target from $147 to $159.

ORCL Price Action: Oracle shares were up 11.6% at $127.36 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Oracle.