On Monday after market close, Oracle Corporation (NYSE:ORCL) delivered a better-than-expected fiscal fourth quarter report and revenue guidance for its undergoing quarter. Although it is significantly behind its cloud peers, Amazon.com Inc (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), the software vendor seems to be on track as it fights for its place under the sun, which in this scenario, is actually, its majesty, the cloud.

Oracle’s main source of revenue, cloud services and license support, made a 23% progress to $9.37 billion. However, revenue from cloud licenses and on-premises actually dropped 15% as it amounted to $2.15 billion. Revenue from cloud infrastructure expanded 76% and accelerated from 55% growth in the previous quarter, as it amounted to $1.4 billion. Although Oracle is much smaller than its rivals such as Amazon, Microsoft and Google, it is growing faster than both Microsoft and Google on this front. CEO Safra Catz stated the unit’s gross margin is expected to continue expanding. 

Amid the broader rally in technology stocks, shares of Oracle have outperformed the market and the S&P 500 index. Excluding the after-hours trading, Oracle’s shares rose about 43% year to date, while the S&P 500 index rose only about 13%. Over the past year, Oracle has risen more than 50%, far outpacing the 4% rise in the S&P 500 index. Although this performance is a result of several factors, it is largely owed to positive prospects of the company’s cloud ambitions. Oracle’s primary offering in this segment is called the Oracle Cloud Infrastructure (OCI) and it gives corporations various cloud computing services such as storage and networking, while promising security, reliability and scalability. Although it is lagging behind Amazon, Google and Microsoft. Oracle is doing a good job at positioning itself in a market that is forecasted to grow to $947.3 billion by 2026. All in all, Oracle, known for its database technology, is undergoing a successful business model transformation as it focuses on cloud subscriptions, and the cloud is certainly the right place to be at the moment. During the reported quarter, Oracle revealed that more of its cloud services were approved for use by U.S. defense and intelligence agencies. 

Following Microsoft’s footsteps, the software giant has followed with its own AI bet. Oracle partnered with start-up Cohere to bring in generative artificial intelligence to the cloud service. Cohere has agreed to use Oracle’s cloud infrastructure. Oracle has started to use the tool, Cohere AI cloud service, internally. After confirming the partnership, Oracle’s founder and chief technology officer, Larry Ellison stated that such specialized large language models will be essential to highly trained professionals to make efficient use of their precious time. Still far behind Microsoft, as well as Amazon Web Services who unveiled its Bedrock generative AI services and Google who updated its services and models at the most recent conference, Oracle is certainly going in the right direction - towards the cloud.