Oracle Corporation (NYSE: ORCL) has recently showcased its prowess in the tech arena with a compelling third-quarter earnings report.
While slightly missing revenue expectations, the company demonstrated robust growth, with a 7% year-over-year increase, totalling $13.29 billion. This surge was largely fuelled by growing demand for its cloud services, fuelled in part by the explosive interest in generative artificial intelligence.
The stellar performance of Oracle’s cloud services and license support segment was particularly noteworthy, witnessing a remarkable 12% sales uptick, amounting to $9.96 billion. The cloud revenue, a vital component of this segment, soared impressively by 25%, reaching $5.1 billion. Moreover, Oracle marked a historic milestone with large new cloud infrastructure contracts signed during the quarter, propelling its total remaining performance obligations to over $80 billion, a significant leap of 29%. With a commendable 27% surge in net income to $2.4 billion, translating to earnings of $1.41 per share, Oracle’s financial prowess continues to captivate investors and industry observers alike.
Technical
Oracle’s share price journey mirrors the broader upbeat sentiment in the tech sector, boasting an 8% year-to-date gain. Trading in an uptrend, validated by its position above the 100-day moving average, Oracle’s price action reflects a tug-of-war between buyers and sellers.
The $99.36 per share support level, established amidst a surge in buying momentum, acted as a springboard for further gains. However, momentum waned as overbought RSI conditions set in, encountering resistance at $117.79 per share.
Subsequently, a retracement ensued, finding support at the 61.80% Fibonacci Retracement Golden Ratio. This level served as a launching pad for a bullish reversal, hinting at continued upside potential. Should upside momentum persist, a retest of the $117.79 resistance level appears likely. Conversely, renewed downside pressure could refocus attention on the Golden Ratio as a pivotal point of interest.
Summary
Oracle’s robust earnings report underscores its dominance in the tech sphere, which is marked by impressive revenue growth and soaring demand for cloud services. With an 8% year-to-date share price gain and pivotal technical levels, Oracle’s trajectory symbolizes resilience and potential for further upside amid market dynamics.
Sources: Oracle Corporation, Reuters, CNBC, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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