Oracle Corp. is on track for its best year in over two decades because its once-struggling cloud business is being taken seriously by customers and investors.
Siti Panigrahi, managing director and equity research at Mizuho Americas, joins BNN Bloomberg and talks about his thoughts about ORacle's Q1 tops it expectations.
Technically demanding workloads for training artificial intelligence models and marquee customers like Uber Technologies Inc. and ByteDance Ltd.’s TikTok have fueled a rapid expansion of Oracle’s cloud infrastructure business over the past year. Wall Street analysts project that the unit will generate more than $10 billion in annual sales in the fiscal year ending in May 2025.
Oracle first launched a cloud infrastructure service in 2016, but it struggled to gain traction. Thomas Kurian, who led the initiative, left the company in 2018 over a strategy disagreement with Chairman Larry Ellison and joined Alphabet Inc.’s Google to run its cloud unit. The total infrastructure market increased 23% to $84 billion in the third quarter, the fourth consecutive period of year-over-year growth, “with generative AI being a major factor,” John Dinsdale, chief analyst at Synergy Research Group, said in a statement. While Synergy pegs Oracle for just a single-digit share of that spending, the market is expected to continue to expand with greater demand for AI services, he said.
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