Oracle stock ORCL gained 1.92% on Tuesday as the company expanded its artificial intelligence ambitions through a healthcare collaboration with AstraZeneca, while analysts pointed to improving software demand and potential support from Nvidia for its data-centre expansion.
The healthcare partnership will explore technology to help clinicians identify patients for clinical trials, improve treatment pathways and connect medical research with routine care.
The initiative adds to Oracle’s efforts to expand its AI applications beyond cloud infrastructure.
However, the company continues to face scrutiny over the cost of its data-centre investments and the financing required to deliver previously contracted capacity.
The broader market reversed losses on Tuesday after oil prices fell. The Dow Jones was up 1.06% at the time of writing. The S&P 500 gained 0.46% while the Nasdaq Composite rose 0.2%.
Nvidia may provide financing support to Oracle
TD Cowen said Nvidia could be providing credit support to Oracle as the cloud computing company expands its data-centre footprint.
Analyst Michael Elias wrote in a research note that the firm’s latest checks indicated Nvidia was supporting Oracle either through financial backstops or by leasing computing capacity directly and subleasing it to Oracle.
TD Cowen said this could partly explain Oracle’s recent data-centre leasing activity in Southeast Asia in support of its reported agreement with Tencent.
The analyst also said Oracle was in active discussions about vendor financing as it sought to deliver capacity already contracted with customers.
Such arrangements could help the company manage the costs associated with expanding its infrastructure.
TD Cowen views Oracle’s return to leasing as a potential indication of future growth in remaining performance obligations, a measure of contracted revenue yet to be recognised.
The developments come as investors assess the financial risks associated with the rapid expansion of AI infrastructure and the debt needed to fund it.
Software survey points to improving Oracle demand
A separate survey by BNP Paribas indicated that demand for Oracle’s software products improved in October after weakening in July.
Analyst Stefan Slowinski said the company’s trailing spending score, which measures spending over the previous three months, was surprisingly strong.
Europe was a particular bright spot in the latest survey.
Generative AI remained the category with the highest demand, replacing cybersecurity at the top of the survey’s spending rankings.
Human capital management and procurement recorded the weakest demand.
Slowinski said the results could indicate that generative AI was reaching a level of maturity at which businesses were allocating more budget to the technology.
Oracle’s database services offered through Amazon Web Services and Microsoft Azure moved into the survey’s top three most-in-demand products.
Oracle Cloud Infrastructure and Fusion applications also recorded improvements.
The survey found positive results for Amazon Web Services, Google Cloud and Microsoft, while IBM, Zoom and Adobe recorded weaker scores.
Snowflake also outperformed competitor Databricks in the survey, supported by demand for its Data Science and Snowpark offerings.
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