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It was a fun week for Oracle. One of its engineers, Saurabh Netravalkar, helped the US national cricket team to a surprise victory over Pakistan on the World Cup in America.
And second, Oracle secured its status because the surprise winner of the factitious intelligence revolution. Four years ago, Larry Ellison's company was essentially blindsided. As a license-based software company with significant historical money flows, Oracle relied on them to perform the expensive mergers and acquisitions needed to make even a modest splash.
Since then, nevertheless, its market cap has grown to almost $400 billion as its subscription-based cloud computing offering has been chosen by corporations like OpenAI because the backbone of their large language models. Ellison called the turnaround “astonishing” in the course of the company's earnings call this week. Such changes in course are difficult to tug off, but Ellison seems to have pulled it off.
Oracle shares rose 13 percent on Wednesday, adding $45 billion to its market capitalization. The number Wall Street was focused on was the so-called “remaining performance obligations,” also generally known as customer purchase commitments that may eventually turn into accounting revenue. The RPO balance got here in at $98 billion, an enormous 44 percent increase from a yr ago. In turn, profits rose 10 percent while money flow exploded much more.
Ellison called 2020 a turning point for Oracle. Coincidentally, Oracle and Salesforce – founded by Ellison's protégé Marc Benioff – each had market capitalizations of around $170 billion on the time. Salesforce has had a mixed fortune since then and is now price $230 billion. The software-as-a-service pioneer is struggling to navigate its way into the AI era because it and other competitors dodge fears that AI could make application software obsolete.
Oracle, whose heritage is within the database space, bet that it may very well be considered one of the winners in cloud infrastructure, alongside Microsoft and Amazon. That gave the impression of a tall order, however the technology it was developing happened to be fit when AI got here along. It's not quite the identical because the U.S. team's surprise victory over Pakistan. But it's secure to say that few, aside from perhaps Ellison, saw that AI victory coming.
