(Reuters) -Oracle on Monday topped fourth-quarter revenue estimates and forecast an upbeat first quarter, driven by growing demand for its cloud offerings from companies deploying AI, sending its shares up nearly 4%.
Oracle (NYSE:ORCL)'s push into the cloud computing market has started to bear fruit, helped by its acquisition of electronic medical records firm Cerner (NASDAQ:CERN) last year that has helped it better compete with industry giants like Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN).
The cloud and software company has also boosted its AI cloud offerings, including its partnership with Nvidia (NASDAQ:NVDA) to make the chip company's AI software and chips available to Oracle customers via its cloud services.
Oracle's revenue for the fourth quarter jumped about 17% to $13.84 billion, beating analysts' estimates of $13.74 billion, according to Refinitiv.
Cloud revenue rose 54% to $4.4 billion.
Analysts believe that given the company's partnership with Nvidia, Oracle Cloud Infrastructure (OCI) is well-positioned to become a major AI/ML development platform, which could be another leg of emerging growth.
"Companies doing LLM (large language model) development such as Mosaic ML, Adept AI, Cohere plus 30 other AI development companies have recently signed contracts to purchase more than $2 billion of capacity in Oracle's Gen2 Cloud," Oracle Chairman and Chief Technology Officer Larry Ellison said in a statement.
The company forecast its total revenue to rise 8% to 10% in the first quarter. Analysts on average were expecting growth of about 8%.
Oracle expects cloud revenue, excluding Cerner, to grow at least at similar rates in fiscal 2024 as in 2023, Chief Executive Safra Catz said on a conference call with analysts.
The company's shares, which closed at their record high of $116.43 on Monday, were up at $120.53 in extended trading.