Oracle missed revenue estimates for the first quarter of 2023 and projected weaker-than-expected growth for the second quarter. The company attributed the shortfall to a tough economy that is pressuring cloud spending by businesses. However, Oracle said it is seeing strong growth in its cloud infrastructure business, driven by the adoption of artificial intelligence applications.
Oracle has signed contracts with AI development companies for more than $4 billion of capacity in its Gen2 Cloud, which is twice as much as it booked in Q4. The company’s shares have gained about 55% so far this year, with its fastest-growing segment, infrastructure-as-a-service, growing 66% to $1.5 billion. Revenue from cloud services advanced 30% to $4.6 billion, while revenue for the quarter stood at $12.45 billion, slightly below analysts’ estimates. Excluding items, the company earned $1.19 per share, compared with estimates of $1.15.