Oracle jumps 11% premarket as AI demand challenges 'SaaS apocalypse' fears

Oracle (ORCL) shares jumped 11% in premarket trading on Wednesday after the company delivered stronger than expected results and pushed back against fears of a looming “SaaS apocalypse,” easing investor concerns about both AI disruption and its recent debt raise.

Revenue climbed 18% to $17.19 billion, beating the $16.92 billion analysts, according to Wall Street Journal. Cloud revenue rose 41%, while cloud infrastructure sales increased by 81%, highlighting strong demand tied to artificial intelligence.

Management used the earnings call to directly address concerns that generative AI could undermine traditional software vendors. Executives argued the opposite, saying customers want AI embedded directly into mission critical systems rather than replacing them with standalone tools.

The results also helped calm worries about Oracle’s balance sheet after the company said it planned to raise up to $50 billion in debt and equity to fund AI infrastructure. Oracle said $30 billion has already been raised through investment-grade bonds and mandatory convertible preferred stock, with demand heavily oversubscribed.

Oracle’s gains also lifted the iShares Expanded Tech-Software Sector ETF (IGV) about 1% in premarket trading, where Oracle is the fourth-largest holding. The move contrasted with bitcoin, which is down roughly 0.5% ahead of U.S. CPI data, suggesting the tight correlation between software stocks and bitcoin may be easing.

Earlier this year the two had moved closely together. IGV fell about 34% from its October high, a decline that coincided with bitcoin’s roughly 50% correction as both software stocks and crypto sold off in tandem.