Oracle topped Wall Street targets, but the stock is sinking over 4% (ORCL)

larry ellison

Oracle reported strong quarterly results after the closing bell on Thursday afternoon, beating Wall Street expectations. Even so, the stock is down more than 4% in after-hours trading at the time of writing.

The database giant posted:

Quarterly revenue of $9.63 billion, versus an analyst estimate of $9.57 billion, and up 6.2% year-over-year.
Adjusted earnings of $0.70 per share, compared with estimates of $0.68.

In a press release, Oracle attributes much of its growth to its cloud computing business, which it says grew 44% from the year-ago period to revenues of $1.5 billion.

Oracle's cloud computing software and services compete head-to-head with the likes of Amazon Web Services and Microsoft Azure, which are seen as the leaders in the enterprise cloud market. Amazon Web Services is expected to do $18 billion in revenue this year, while Microsoft's cloud computing business is on a $20 billion annualized run rate.

It's led to a major cloud computing battle, as Amazon and Microsoft release new products to steal away Oracle customers, even as Oracle chairman Larry Ellison and Amazon engage in an ongoing war of words over who owns the future of the market.

Oracle CEO Mark Hurd said in Thursday's announcement that the company expects to close $2 billion in enterprise cloud software subscription deals over the next four quarters, reflecting the company's emphasis on the cloud.

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