Despite missing fiscal fourth-quarter earnings estimates, Oracle (ORCL) shares are moving higher after Tuesday's market close. The cloud computing company posted adjusted earnings of $1.63 per share (expected $1.65 per share) and $14.29 billion in revenue (expected $14.57 billion).

Oracle has also announced a partnership with Google's Cloud Platform (GOOG, GOOGL) and OpenAI has selected its Oracle Cloud Infrastructure "to extend" Microsoft's Azure AI platform (MSFT).

Synovus Trust Senior Portfolio Manager Dan Morgan says Wall Street is pushing those earnings figures to the side in favor of the hype around these new partnerships and Oracle's cloud infrastructure.

"They generate about 38% of their revenues right now from cloud. And Oracle's got a great opportunity," Morgan tells Yahoo Finance. "If they can cross-sell their huge mega database population, which is about 400,000 installs into their cloud business, it'd be huge."

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This post was written by Luke Carberry Mogan.

Video Transcript

Oracle just reporting fourth quarter earnings as well as two separate A I partnerships.

Moments ago, the stock seems to be rising on those announcements with Google and with Microsoft and Open A I joining us now Dan Morgan, senior portfolio manager at so novas Trust.

So we got a two for or maybe even a three for I guess, Dan with the earnings and then these partnership announcements.

Um what's your big takeaway here?

What do you think is the most important thing that investors should be looking out from this news?

Well, Julie, it's kind of a mixed report because as you mentioned in the beginning, uh they missed on earnings, they missed on revenue.

The all important number, which is cloud services revenue, which as you mentioned, they missed slightly and we also saw the overall growth rate fall to about 20% compared to 25% in the third quarter.

But then they beat on their OC I number, their infrastructure cloud business, as you mentioned was a little bit better expected around 2 billion.

So it seems to me guys like the street is kind of pushing that aside and they're really just excited about these partnerships and anything that Oracle can do to, you know, move forward their cloud business, they're gonna get excited about it.

I mean, they generate about 38% of their revenues right now from cloud.

And Oracle's got a great opportunity if they can cross sell their huge mega database population, which is about 400,000 installs into their cloud business.

It'd be huge.

So I think that's what everybody's excited about these partnerships.

Yeah.

And Dan, they're just talking to the execs getting a little commentary saying throughout fiscal 2025 they talk about continued strong A I demand to push Oracle sales to RPO even higher result in double digit revenue growth this fiscal year.

You know, Dan, for, for investors listening right now, you know, they're always thinking, looking for smart A I plays.

Do you consider Larry Ellison's company to be one of them, Dan, you know, we do, I mean, I look at Oracle as a dominant player database.

Uh They have about 42% market share.

They've been around forever.

Josh, I've been following Oracle for over 30 years and they've got into all the other hot businesses in the past and then they got into cloud and you know, they do have a bit of a distinct advantage over, let's say an alphabet or Google or GCP.

They're not quite as large, obviously as Aws with Amazon and Azer, with Microsoft, but they're gaining, they're gaining share I mean, there's still a single digit market share, but they're high, you know, single digits and they're moving up if they can continue to, like I say, take advantage of this great opportunity they have with this huge installation base.

And I think that's what the street sees.

And we also see Josh Consistency, Oracle is very consistent because of their customer base is heavily uh governmental.

They have very reoccurring, about 70% of their revenues are reoccurring.

So it's not as risky as let's say, a high flying software company that's hoping to close that deal by the end of the quarter so they can beat numbers and Tim what, what is the role that that Oracle is playing?

You know, when we hear about these new partnerships with the open A I for its infrastructure, what exactly like, where does it fit in?

Well, that's a good question, Julie.

I unfortunately, I don't have a perfect answer, but I would expect because those are the leadership companies I mentioned Microsoft Azure and they're really gaining market share right now in the aws.

The fact that they're able to put together these partnerships and be able to work together opposed to working against each other is huge.

So I think that's why the street was reacting so positively.

Uh to this announcement, I think Josh and Julie, if we were to not have those announcements that they made with those partnerships with GCP and with Azer, um I think you might have gotten a little bit of a different reaction on this stock with this earnings report because of that myth that they had in cloud services.