Shares of tech firm Oracle rose by more than 8 % and closed at a record high after it reported returns that exceeded expectations of investors. A couple of years ago Oracle showcased its best performance when it closed down at $56.99 that helped to lift the S&P index to a record high which also helped to pull up several tech stocks like Adobe, Paypal and Microsoft. Oracle has reported growth in revenue of 1 % to $11.14 billion that beat analysts expectation of $10.93 and EPS was at $1.16 that overshot expectations of $1.07.
After the revenue report of Oracle many analysts have increased their price targets and according to Dimitri Kallianiotis of Atlantic Equities it could soon reach $49 from current level of $46. He said that the growth could be due to sales from both cloud and an on-premise license which was reassuring in view of disappointing results from other infrastructure vendors. Nomura’s Eberle has reduced rating on Oracle stated that its guidance for capital expenditures in 2020 was at $2.2 billion which was higher than previous level of $1.7 billion in previous years. Increase in capital costs could be for expenditure on infrastructure of data center and cloud services.
Oracle’s Cloud Services and License Support division delivered $6.80 billion revenue which was above analysts’ estimate of $6.76 billion the firm’s Cloud License and On-Premise License segment earned $2.52 billion in revenue and in its earnings statement executives stated that major growth was witnessed in NetSuite and Fusion cloud applications. During the quarter Oracle also cut down employee strength and recently also announced partnership with long term competitor Microsoft. Oracle CEO Safra Catz stated that the firm is aiming for double digit growth in EPS and revenue for fiscal year 2020 and since beginning of 2019 Oracle’s shares have gone up by 17 %.