Oracle (ORCL) shares rose 11% in premarket trading Wednesday after the company delivered stronger-than-expected results and countered fears of an impending “SaaS apocalypse,” easing investor concerns about AI disruption and its recent surge in debt.
Revenue rose 18% to $17.19 billion, topping analysts’ $16.92 billion, according to the Wall Street Journal. Cloud revenue increased 41%, while cloud infrastructure sales increased 81%, highlighting strong demand tied to artificial intelligence.
Management used the earnings call to directly address concerns that generative AI could undercut traditional software vendors. Executives argued the opposite, saying customers want AI to be integrated directly into mission-critical systems rather than replacing them with standalone tools.
The results also helped ease concerns about Oracle’s balance sheet after the company said it planned to raise up to $50 billion in debt and equity to fund AI infrastructure. Oracle said $30 billion has already been raised through investment-grade bonds and mandatory convertible preferred shares, with demand greatly oversubscribed.
Oracle’s gains also lifted the iShares Expanded Tech-Software Sector ETF (IGV) by about 1% in premarket trading, where Oracle is the fourth-largest holding. The move contrasts with bitcoin, which is down about 0.5% ahead of the US CPI data, suggesting the close correlation between software stocks and bitcoin may be declining.
Earlier this year, the two had moved in close together. IGV fell about 34% from its October high, a drop that coincided with bitcoin’s roughly 50% correction as both software stocks and cryptocurrencies sold off at once.
