4 hours ago 1

OFSS shares rally over 9%, mirroring parent Oracle’s surge on cloud boom

Synopsis

Shares of Oracle Financial Services Software (OFSS) rallied over sharply after parent Oracle’s U.S. stock soared on a blockbuster cloud forecast. Oracle’s multi-billion-dollar client wins and aggressive expansion in multi-cloud services boosted optimism that OFSS will benefit from higher license and cloud revenue growth.

OFSS shares rally over 9%, mirroring parent Oracle’s surge on cloud boom

Shares of Oracle Financial Services Software (OFSS) jumped more than 9% to Rs 643.95 on the BSE on Wednesday, tracking the dramatic 27% after-hours surge in parent company Oracle Corp’s shares. Investors cheered Oracle’s ambitious cloud outlook, including a forecast for half a trillion dollars in booked revenue, and multi-billion-dollar client deals that could drive OFSS’s own license and cloud revenue higher.

Cloud momentum drives OFSS gains

Oracle Corp said on Tuesday that its Oracle Cloud Infrastructure (OCI) business expects booked revenue to exceed half a trillion dollars, with remaining performance obligations (RPO) jumping 359% to $455 billion in the first quarter ended August 31. CEO Safra Catz said, "Over the next few months, we expect to sign up several additional multi-billion-dollar customers and RPO is likely to exceed half-a-trillion dollars."

The U.S.-listed Oracle shares surged 27% in post-market trading, the biggest gain since 1999, after the company forecast OCI revenue growth of 77% to $18 billion this fiscal year and $144 billion over the subsequent four years. Oracle has also signed deals with Amazon, Alphabet, and Microsoft to run OCI inside their respective cloud infrastructure, driving revenue from these clients up 1,529% in the first quarter.

OFSS benefits from parent’s cloud boom

OFSS said its license and cloud revenue grew 13% over the last fiscal year. Analysts note that the company is well-positioned to leverage Oracle’s cloud technology and multi-cloud contracts. Catz highlighted, "We made it very easy for our customers to directly connect all their databases ... to the world's most advanced AI reasoning models—ChatGPT, Gemini, Grok, all of which are uniquely available in the Oracle Cloud."

Market context and stock performance

While OFSS shares are down 27% on a year-to-date basis, the stock has gained roughly 10% over the past month. Traders lifted OFSS sharply on Wednesday, reflecting optimism that Oracle’s cloud expansion will translate into stronger growth for its Indian subsidiary.

Also read | An Oracle may displace Elon Musk as the world's richest billionaire

Oracle also signed four multi-billion-dollar contracts with three different customers in the first quarter, helping total revenue climb 12% to $14.93 billion. For the second quarter, Oracle expects total revenue growth of 12% to 14%, while cloud revenue is projected to rise 32% to 36%.

What’s next for investors?

With Oracle planning to add 37 more data centres across its hyperscaler partners, Chairman Larry Ellison said, "We expect MultiCloud revenue to grow substantially every quarter for several years." Investors are now closely watching whether this cloud momentum will continue to drive OFSS revenue and margins in the coming quarters.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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