Close this search box.
#Tech news

Oracle’s Cloud Infrastructure Business Surges with AI Enhancement, Driving Gains

Oracle's Cloud Infrastructure Business Surges with AI Enhancement, Driving Gains

Oracle Shares Surge Nearly 9% on Cloud Infrastructure Boost from AI Applications

Investors cheered Oracle’s robust performance in its relatively low-cost cloud infrastructure services, driven by increased demand from artificial intelligence applications. If the gains persist, Oracle could see an addition of over $28 billion to its market valuation, which stood at $340 billion as of Tuesday’s market close. Year-to-date, Oracle shares have already gained 18%.

Oracle has been strategically enhancing its cloud infrastructure unit, aiming to capitalize on the growing trend of companies renting cloud computing and storage services. However, it faces stiff competition from tech giants like Google, Microsoft, and

Positioning itself as a cost-effective alternative to its competitors, Oracle’s cloud infrastructure has attracted business from various AI startups, including xAI, founded by Elon Musk. Oracle recently announced partnerships with OpenAI and Google Cloud to expand its cloud infrastructure offerings to customers, further solidifying its position in the AI platform market.

Evercore analyst Kirk Materne highlighted the significance of these partnerships, emphasizing Oracle’s growing credibility as an AI platform provider. The collaboration with Google also broadens Oracle’s distribution for its database services.

Despite its strong performance in the cloud infrastructure sector, Oracle’s fourth-quarter results missed estimates, partly due to competition faced by its legacy database and enterprise resource planning software from more affordable alternatives. Oracle’s stock currently trades at a lower forward earnings estimate compared to its tech peers, including, Microsoft, and Alphabet.

Leave a comment

Your email address will not be published. Required fields are marked *