Oracle (ORCL) -) shares tumbled in Tuesday trading after the cloud-focused enterprise-software group posted a muted near-term outlook for business spending, offsetting modestly firmer-than-expected fiscal-first-quarter earnings.
Adjusted earnings for the three months ended in July rose 15.5% from a year earlier to $1.19 a share, topping Wall Street forecasts by 4 cents. Group revenue rose 9.2% to $12.5 billion, just ahead of analysts' estimates, thanks in part to 30% surge in overall cloud revenue to $4.6 billion.
Looking into the current quarter, Oracle estimates revenue growth in the region of 5% to 7%, missing Wall Street estimates of around 8.2%, although it sees more double-digit gains for cloud on the bank of artificial-intelligence demand.
"Is Generative AI the most important new computer technology ever? Maybe!," said Chairman Larry Ellison.
"Self-driving cars, molecular drug design, voice user interfaces—billions of dollars are being invested in AI. As of today, AI-development companies have signed contracts to purchase more than $4 billion of capacity in Oracle's Gen2 Cloud. That's twice as much as we had booked at the end of Q4."
"The largest AI technology companies and the leading AI startups continue to expand their business with Oracle for one simple reason—Oracle's RDMA interconnected Nvidia Superclusters train AI models at twice the speed and less than half the cost of other clouds," he added.
Oracle shares at last check were trading more than 12% lower at $111.16. For 2023 through the close of Monday's trading, the stock had risen 55%.
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