One of the big winners of the AI craze! Cloud giant Oracle (ORCL.US) posts strong performance, Wall Street sounds bullish trumpet.

In the eyes of some Wall Street investment institutions, the technology giant Oracle (ORCL.US), known for its cloud computing services and database software worldwide, has officially joined the ranks of technology giants benefiting comprehensively from artificial intelligence. The leaders in this lineup are tech giants such as Nvidia, Microsoft, and Google. In the early trading on Tuesday, Oracle's stock price soared more than 13% to $129.37, reaching a 52-week high. The cloud computing giant announced better-than-expected third-quarter results early Tuesday morning Beijing time, and stated that it has signed a series of large cloud computing service contracts driven by the demand for artificial intelligence. As of the end of the third quarter last month, Oracle's remaining performance obligations (RPO), a measure of Oracle's sales backlog, stood at $80 billion, significantly exceeding analysts' expectations of $59 billion. This indicates that the global trend of deploying artificial intelligence technology is having a much more positive impact on Oracle than investors had realized. The performance data shows that Oracle's third-quarter revenue as of February was $13.3 billion, a 7.1% year-on-year increase, in line with market expectations; excluding certain items, earnings per share were $1.41, exceeding market expectations of $1.38. In the third quarter, the much-anticipated Oracle cloud computing business revenue grew by 25% year-on-year, reaching $5.1 billion, slightly higher than the market expectation of $5.06 billion. Oracle executives also revealed that they will soon release an "exciting joint statement" with Nvidia. With the AI boost, Oracle's stock price has risen by 40% in the past year, and it is now making a push for new highs. Since 2024, the stock has surged by 7%, almost in line with the broader market S&P 500 index. Amid the global trend of technology companies increasing their efforts in developing generative AI technologies like ChatGPT, Oracle is positioned as one of the biggest winners of this trend, with its global customer base for cloud computing infrastructure (IaaS) and cloud computing applications growing significantly. Looking at the revenue growth in the past year, Oracle's revenue scale has been climbing back, indicating that the company's cloud computing services are benefiting from the growing demand for cloud computing services driven by the global trend of deploying artificial intelligence (AI). The renowned research institution Wolfe Research has stated in a report that the booming development of generative AI, which requires powerful computing capabilities, could boost the strong demand for Oracle's cloud computing services from global enterprises. In terms of performance expectations, Oracle executives expect total revenue to grow by around 5% in the fourth quarter ending in May, in line with Wall Street's expectations; excluding Cerner's cloud computing service revenue, growth is expected to be 23%, also in line with expectations. Oracle executives also anticipate capital expenditures for this fiscal year to reach $7.5 billion. Additionally, they mentioned that as the company establishes more data centers to meet the demand for cloud computing, this expenditure will increase to $10 billion by the fiscal year 2025, exceeding analysts' average expectation of around $8.9 billion. Wall Street Cheers: Oracle Joins the Ranks of Technology Giants Benefiting Fully from AI Analyst Dan Ives from Wedbush Securities, a renowned Wall Street investment institution, wrote in an investor report, "We believe the most important number for Wall Street and the cloud computing industry is the $80 billion RPO (a 29% year-on-year increase), which far exceeds Wall Street's expectations for strong cloud demand, as AI demand is driving overall growth in cloud computing." The firm also stated, "As AI demand continues to drive further data center builds, there are at least 40 new AI-related projects exceeding $1 billion that have yet to come online, and a massive $10 billion capital expenditure budget is planned for 2025 (compared to $7.5 billion in 2024)." "AI is accelerating the demand for cloud computing services, which remains the central argument for what we view as the AI revolution." After Oracle released its latest performance figures, Wedbush Securities set a 12-month target price of $150 for Oracle and maintained a "buy" rating. Other Wall Street investment institutions also believe that Oracle is highly likely to continue benefiting from AI-related cloud computing service spending. Brad Sills, an analyst from Bank of America, wrote, "Oracle's cloud infrastructure grew by 49% (on a constant currency basis), which is very impressive to us, as the sustained demand and execution, as well as the strong 50% growth in the second quarter (on a constant currency basis), have only slightly slowed down." "Encouragingly, new solutions such as OracleDB on Azure and high-performance Alloy products are making a difference. This is a good sign for future growth trends." Bank of America rates Oracle as "neutral," but has raised the target price from $122 to $144 for Oracle. Siti Panigrahi, an analyst from Mizuho, also mentioned the strong performance of Oracle's cloud computing infrastructure business, calling this quarter's results a "significant rebound," indicating that the demand for the company's cloud computing services on the enterprise side "far exceeded market expectations." Panigrahi reiterated his "buy" rating on Oracle and raised the target stock price from $140 to $160. In addition, Bernstein maintains an "outperform market" rating on Oracle and has raised the target stock price from $147 to $159; Jefferies maintains a "buy" rating on Oracle and has raised the target stock price from $140 to $150; UBS maintains a "buy" rating on Oracle and has raised the target stock price from $130 to $150.