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Oracle's AI Push: A Potential Catalyst for Q1 Earnings Growth?

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Oracle’s (ORCL - Free Report) first-quarter fiscal 2025 results, scheduled to be reported on Sept. 9, are likely to have been driven by the rising demand for the company’s innovative artificial intelligence (AI) solutions.

Oracle’s AI strategy is comprehensive, embedding AI functionalities across its cloud infrastructure, databases, enterprise applications and analytics tools. Oracle has been steadily enhancing its AI offerings, with a particular focus on machine learning (ML), natural language processing and computer vision. These advancements aim to provide customers with more intelligent, efficient and automated solutions.

ORCL is uniquely positioned to leverage its AI capabilities to drive growth in its cloud services and software licensing businesses. The Zacks Consensus Estimate for ORCL’s fiscal first-quarter 2025 cloud services and license revenues is pegged at $10.81 billion, indicating year-over-year growth of 13.3%. 

Click here to know how Oracle’s overall first-quarter fiscal 2025 results are likely to be.

Oracle Corporation Price and EPS Surprise

Oracle Corporation Price and EPS Surprise

Oracle Corporation price-eps-surprise | Oracle Corporation Quote

ORCL's AI Ambitions: Driving Innovation Across the Enterprise

The company's Oracle Cloud Infrastructure (“OCI”) has been enhanced with AI capabilities, offering enterprises powerful tools for data analysis, automation and decision-making, which are expected to have increased the adoption of OCI in the to-be-reported quarter. This strategic move could potentially translate into increased cloud revenues and market share gains in the competitive cloud computing sector dominated by players like Microsoft, Google and Amazon (AMZN - Free Report) .

At the forefront of Oracle's AI initiatives is the company's Autonomous Database, a self-driving, self-securing and self-repairing database management system powered by machine learning algorithms. By automating routine tasks and optimizing performance, the Autonomous Database promises to streamline database operations, reducing costs and freeing up IT resources for more strategic endeavors.

Oracle's AI-infused cloud offerings extend beyond databases. The company's AI-powered Cloud Applications suite, encompassing ERP, Human Capital Management and Customer Experience solutions, aims to enhance operational efficiency, decision-making and customer engagement for businesses across industries.

Oracle and its subsidiary, NetSuite, have been making considerable advancements in AI, including solutions like NetSuite’s Analytics Warehouse Multi-Instance Connector and Text Enhance, as well as Oracle Fusion Data Intelligence.

Further expanding its AI ecosystem, Oracle has announced new AI innovations in the latest release of the Oracle APEX low-code development platform. The introduction of the APEX AI Assistant simplifies application development, enabling developers to rapidly build feature-rich, mission-critical applications at scale.

Strategic Partnerships to Aid ORCL's AI Efforts

Recognizing the need for strategic partnerships to stay competitive in the fast-paced AI market, Oracle has formed alliances with key players in the industry. Oracle has announced a major collaboration with Palantir Technologies (PLTR - Free Report) , certifying Palantir's Foundry Platform and Artificial Intelligence Platform on Oracle Cloud Infrastructure across all distributed cloud deployment options. This partnership combines ORCL's distributed cloud, AI infrastructure and sovereign AI capabilities with Palantir's AI and decision acceleration platforms, aiming to accelerate AI initiatives for businesses and governments. 

Collaborations with SambaNova Systems for AI hardware and NVIDIA (NVDA - Free Report) for GPU-accelerated AI computing are expected to have bolstered Oracle's AI capabilities in the to-be-reported quarter. 

Shares of this Zacks Rank #2 (Buy) company have soared 35.3% year to date, outpacing the Zacks Computer and Technology sector’s growth of 15.5% and many of its tech sector peers. As Oracle prepares to report its next quarterly earnings, investors will be keenly watching for concrete evidence of AI-driven growth. Key metrics to monitor include cloud revenues, particularly from AI-enhanced services, as well as new customer acquisitions and expansion of existing accounts through AI upselling. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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