Oracle CloudWorld Highlights 'AI-Driven Tech Services,' But Revenue Growth Requires Patience: Analyst

Oracle Corp's ORCL CloudWorld in Las Vegas had no shortage of artificial intelligence (AI) buzz, but investors hoping for a quick windfall might need to temper expectations.

JPMorgan analyst Tien-tsin Huang, who attended the event, noted that while Oracle's multi-cloud advancements are laying the groundwork for the future, the immediate impact on revenues is still uncertain.

"We saw numerous examples of high-value AI-driven tech services," Huang stated, highlighting the long-term potential of AI in transforming enterprise workflows.

However, he remains cautious about the near-term outlook, adding, "Near-term demand improvement remains elusive," despite growing client interest in AI.

Oracle Makes A Big Move

Oracle's big move at CloudWorld was its announcement of Oracle Database (ODB) on AWS, building on similar launches with Microsoft Corp‘s MSFT Azure and Alphabet Inc‘s GOOG GOOGL Google Cloud.

This multi-cloud push, Huang believes, is a critical strategy for companies looking to "maximize the value of GenAI" by optimizing data across different platforms.

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Yet To See Material Revenue Momentum

Yet, the short-term demand for tech services in AI remains lukewarm. "We did not sense that any have achieved material revenue momentum in the category," Huang observed, signaling that while enterprise clients are interested in AI, the financial payoff might still be a few quarters away.

Accenture: A Secular Winner

Long-term, Huang is optimistic about Oracle and its tech services partners, particularly Accenture PLC ACN, which he sees "as a secular winner" in helping companies customize and optimize generative AI solutions for business processes.

As companies transition to a more interoperable, multi-cloud environment, the opportunities for AI and tech services will grow, but patience is key.

For now, investors should keep their eyes on the big picture, as the immediate AI windfall for Oracle might take some time to materialize.

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