Oracle stock soars on AI-fueled earnings growth and Amazon deal

Oracle shares jumpiness delivers a beat on earnings for the first quarter the software company also announcing a partnership with Amazon web services as well as a multicloud partnership with Google Cloud here to discuss it all is more insights and strategy founder CEO and chief analyst Patrick Morhead uh Patrick always great to see you I want to start Patrick with the news let's get your take on uh the earnings print and also of course Patrick with Oracle CEO software cats is calling here her words the biggest news a multi agreement with AWS what do you make of it yeah so this company's uh on a role I mean like you said had a be beat but the big news is this deal with AWS and Josh hell half frozen over okay these two companies have been essentially at war with each other uh since AWS was formed 15 years ago and aw's uh thesis before this was they were going to take out Oracle and that was in addition to uh Azure and Google for these large Enterprise customers and they they would use their database but what's clear today and this adds on to the deal uh that came previously with Microsoft and then Google was that Oracle database is very much alive and well and their Enterprise customers are demanding it so literally they're putting exit data database boxes inside of AWS and uh giving customers the ability to run the autonomous database on this as well and what this means for let's say AWS is AWS customers who use Oracle as their database can more easily use that data with AWS Services let's say like Bedrock or generative Ai and so Patrick I'm looking at the reaction right now Oracle Shares are surging on this we're up % and by the way you know year to date the stock was already had already rallied very hard about 35% heading into the print you've seen 8% move Patrick does that does that seem justify to you off this news it absolutely does and for the Savvy investor what they recognize is there was this standoff that was happening for 10 or or 15 years between Oracle and these classic uh Cloud providers and and what they see is that that enterprises want Oracle they're not going to dump their Oracle database and just shift over to a a cloud database some have but not a lot and and they're seeing what this means for the longterm for Oracle and so I'm curious Pat you know often listen we we you're on the show a lot we talk about the cloud Wars you talk about the Giants and Amazon and Microsoft and Google how does and taking this news into account today how do you think about oracles and Larry Ellison's place in that fight how they compare and contrast yeah so first and foremost um Oracle is the only company that just does commercial customers Amazon Microsoft and Google uh they do commercial and they have consumer plays and where Oracle has been exceptionally uh strong has been in the largest Enterprise governments that require the most security Mission critical environments and very highly regulated so in the cloud space they very much compete with both those companies and there're really uh three facets of cloud for Oracle and the first one is this classic infrastructure as a service uh called oci uh while not nearly as big as let's say AWS or Azure it's really targeted at at those customers that I talked about in fact uh azure outsources some of its infrastructure uh to Oracle particularly on the on the GPU side and then you have the SAS business the software as the service competes primarily with Microsoft that is a cloud play now while cloud is a smaller percentage of Revenue than some of these uh other companies their commercial business uh is bigger than Google Cloud uh their commercial business is 60 % the size of AWS so on a scale basis uh they're doing quite well and Patrick you know now we wait for the conference call um I'm curious you know Safra cats will be on that call I would imagine Larry Ellison too of course I'm sure Mr Ellison will enjoy taking a Victory lap on on this stock move in the after hours what is their play I'll get you out of this Patrick what is their play in AI specifically yeah their biggest playi play in AI is data Josh the number one thing I mean our checks clearly show that the biggest obstruction from Enterprises going hardcore into AI is the data problem it's getting the data right it's comingling the right data to give generative AI the right Solutions without leaking confidential information and for the customers I talked about Oracle is the place to go so they will be the data broker for the generative uh AI age for the those large customers that's their play and also they have this infrastructure play with oci where they're essentially leasing out vpus for some very large customers out there including Microsoft and I believe a part of open AI all right you can see there Oracle shares popping 8% Patrick great to have you on the show today my friend thank you for joining us thank you