MADRID - Oracle Corporation (NYSE: NYSE:ORCL) has announced plans to invest over $1 billion in the development of a new cloud region in Madrid. The move aims to support Spain's financial sector and other key industries in enhancing resilience and leveraging Oracle Cloud Infrastructure's (OCI) capabilities, including high performance, robust security, and advanced AI and distributed cloud services.
The new cloud region will cater to customers and partners across various sectors in Spain, facilitating the migration of mission-critical workloads to OCI. This initiative is also expected to help organizations comply with regulations such as the Digital Operational Resilience Act (DORA) and the European Outsourcing Guidelines (EBA, EIOPA, ESMA). Telefónica España will serve as the host partner for the new cloud region.
The Madrid cloud region is designed to enable public and private sector entities to modernize applications and drive innovation using data, analytics, and AI. Oracle’s diverse cloud offerings, including Oracle Autonomous Database, MySQL HeatWave Database Service, and OCI AI Infrastructure, are anticipated to be integral to the region's capabilities.
Spanish government officials have welcomed Oracle's investment, highlighting its potential to advance the digital transformation within the country. The Region of Madrid, in particular, sees the investment as a critical component in fostering a digital economy capable of creating quality jobs and attracting talent.
The upcoming cloud region will complement the existing Oracle Cloud Region in Madrid and the Oracle EU Sovereign Cloud Region, which is operated by EU-based personnel. These regions are tailored to meet the data residency and sovereignty needs of customers, especially in sensitive sectors like financial services.
Oracle's investment is part of a broader strategy to enable Spanish enterprises and public sector organizations to harness cloud technologies, aiming to accelerate cloud adoption and enhance business performance. The company's distributed cloud architecture allows for the deployment of hyperscale cloud services in various environments, maintaining consistent performance and scalability.
The announcement has garnered positive responses from leading Spanish organizations, including Telefónica España, Banco Sabadell, and Naturgy, which have recognized the benefits of migrating to OCI in terms of agility, innovation, and compliance with regulatory requirements.
This expansion underscores Oracle's commitment to distributed cloud services and its aim to facilitate the digital transformation globally. The information is based on a press release statement from Oracle.
In other recent news, Oracle Corporation has been the focus of several analysts' updates. BMO Capital Markets maintained its Market Perform rating on Oracle, but raised the price target to $160, crediting strong cloud infrastructure bookings.
Mizuho also expressed confidence in Oracle, raising its price target to $170, spurred by a significant increase in artificial intelligence (AI) bookings. Deutsche Bank maintained a Buy rating on the company's shares, raising the target to $165 and adjusting revenue estimates for fiscal years 2025 and 2026 to $57.7 billion and $64.5 billion, respectively.
Similarly, Citi raised its price target for Oracle to $140, maintaining a Neutral rating on the stock. This adjustment followed Oracle's securing of several key AI training contracts, such as with OpenAI. Piper Sandler increased the price target for Oracle to $150, maintaining an Overweight rating on the stock, following Oracle's announcement of $12.5 billion in new AI contract signings.
These recent developments highlight the increasing confidence in Oracle's future performance, particularly in light of the company's robust AI bookings and cloud infrastructure growth.
InvestingPro Insights
Oracle Corporation's (NYSE: ORCL) strategic investment in a new cloud region in Madrid is set to fortify its presence in the cloud services sector. With a robust market capitalization of 393.12 billion USD, Oracle is a heavyweight in the software industry, reflecting its substantial economic footprint and investor confidence.
Analyzing the company's financial metrics reveals a Price/Earnings (P/E) ratio of 37.67, indicating that investors are willing to pay a higher price for Oracle's earnings, perhaps due to expectations of continued growth and stability in its operations. This aligns with the 13 analysts who have revised their earnings upwards for the upcoming period, as per InvestingPro Tips, suggesting a bullish outlook on the company's financial performance.
Oracle's commitment to shareholder returns is evident in its consistent dividend track record, having raised its dividend for 10 consecutive years. This demonstrates the company's financial health and its ability to generate ample cash flow to reward its investors. Moreover, with a dividend yield of 1.11%, Oracle remains an attractive option for income-seeking shareholders.
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