For a decade, Oracle Corporation ( ORCL ) has been on a journey of remaking its identity from being only a traditional software company to becoming an important player in cloud computing. With its latest earnings report, Oracle officially made it.

Upon reporting its cloud revenue surpassed its software licensing sales during its fiscal third quarter, shares soared more than 13% on Monday. 

Although taking less than 5% of the global cloud market, Oracle gained its place by offering a more affordable alternative to the offerings of the tech titans, Amazon.com Inc ( AMZN ) , Microsoft Corporation ( MSFT ) and Alphabet (NASDAQ:GOOGL). In addition, Oracle also had some big news during its earnings call and it has to do with an AI chip titan, Nvidia Corporation ( NVDA ) .

A hint of a game-changing deal

What also lifted Oracle in the eyes of the market is its teaser that a joint announcement with Nvidia ( NVDA ) will be made in the coming weeks. According to SeekingAlpha, Oracle plans to release details of its newest deal with Nvidia ( NVDA ) next week. With joined forces, Oracle and Nvidia ( NVDA ) are undoubtedly among key players to power the AI revolution by providing solutions that will redefine the computing landscape.

Fiscal third quarter highlights

For the quarter that ended on February 29th, Oracle reported revenue rose 7% YoY to $13.28 billion, coming in slightly below LSEG's consensus estimate of $13.3 billion. Generative AI boosted infrastructure revenue. Oracle's largest business that includes cloud services and license support reported a 12% revenue increase with sales amounting to $9.96 billion and making 75% of the company's total revenue. Cloud revenue alone that makes part of that figure expanded 25% YoY and brought in $5.1 billion. Large new cloud infrastructure contracts lifted Oracle's  total remaining performance obligations up 29%, exceeding $80 billion, which is its all-time record. Oracle confirmed it is building 20 data centers from Microsoft ( MSFT ) and its Azure.

On the other hand, Oracle's other units did not fare as well. The cloud license and on-premises license revenuescontracted 3% YoY to $1.3 billion. Hardware revenue brought in $754 million while contracting 7% YoY, followed by a 5% YoY drop in the services division that made $1.31 billion in sales, both falling short of StreetAccount's estimates.

But, net income soared 27% YoY to $2.4 billion with earnings per share of $1.41 topping FactSet's and LSEG's consensus of $1.38.

Fiscal fourth quarter guidance

Oracle guided for earnings per share in the range between $1.62 and $1.66, and revenue growing between 4% and 6% on a YoY basis. Oracle CEO reiterated that the company's on track to reach and possibly even exceed its sales goal of $65 billion by fiscal 2026.

Maybe not exactly like Microsoft ( MSFT ), but Oracle is now a cloud company.

Oracle is rapidly expanding its cloud data capacity to keep up with rising AI demand. It fought for its place "under the clouds" and is now an acknowledged player next to Microsoft ( MSFT ), Amazon ( AMZN ) and Alphabet-owned Google ( GOOG ). Moreover, with the support of Nvidia ( NVDA ), its momentum can only get even better going ahead.  

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.