(Bloomberg) — Oracle Corp. gave investors a boost by saying the company’s cloud-computing business will continue to grow rapidly in the coming fiscal year after a strong performance in the past quarter. Shares, which had jumped to a record high at the close, rose another 3% in extended trading.

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Cloud sales gained 54% in the fiscal fourth quarter to $4.4 billion, after a 45% jump in the previous period. In the fiscal year ending May 2024, cloud revenue should increase at least as much as in the year that just ended, Chief Executive Officer Safra Catz said on a conference call after the results. John DiFucci, an analyst at Guggenheim Securities, said the continued strength in the unit is abnormal given the current economic environment.

Oracle has focused on expanding its cloud infrastructure business to more forcefully compete with market leaders Amazon.com Inc. and Microsoft Corp., which have seen recent slowdowns. A boom in generative AI, which needs tremendous computing power, is boosting demand for Oracle’s cloud services, executives said. Generative AI startup Cohere said last week that Oracle was among its investors in a $270 million funding round.

“We see shares maintaining their recent positive momentum as the narrative of growing cloud momentum, partly fueled by AI demand, remains intact,” Raimo Lenschow, a Barclays analyst, wrote after results.

Cloud infrastructure revenue increased 76% to $1.4 billion in the period ended May 31, Oracle said Monday in a statement. Cloud application sales jumped 45% to $3 billion, the Austin, Texas-based company said.

Over $2 billion in cloud capacity has recently been contracted by companies doing large language model development such as Mosaic ML, Adept AI and Cohere, Oracle Chairman Larry Ellison said in the statement. “Oracle’s Gen2 Cloud has quickly become the No. 1 choice for running Generative AI workloads,” he said.

Total sales increased 17% to $13.8 billion in the quarter. Analysts, on average, estimated $13.7 billion, according to data compiled by Bloomberg. Profit, excluding some items, was $1.67 a share, compared with the average estimate of $1.58.

“Both of our two strategic cloud businesses are getting bigger — and growing faster,” Catz said in the statement. “That bodes well for another strong year in FY24.”

Shares hit a high of $122.87 in extended trading after closing at a record $116.43 in New York. Oracle has rallied 42% this year, compared with the 32% rise in the iShares expanded software ETF.

Oracle’s other big bet — the acquisition a year ago of digital health records provider Cerner Inc., now called Oracle Health — generated $1.5 billion in the quarter. Oracle began cutting jobs in the division earlier this year after executives promised to improve profitability.

In the current period ending in August, cloud growth excluding Oracle Health will be about 29%, Catz said. Total revenue is expected to increase 8% to 10%, she said. Analysts, on average, projected an 8% gain. Profit, excluding some items, will be $1.12 to $1.16 a share.

Much of Oracle’s cloud revenue is produced by business applications such as Fusion software for managing corporate finances and NetSuite’s enterprise planning tools, which are targeted at small- and mid-size companies. Fusion sales increased 26% in the quarter, compared with 25% growth in the previous period. NetSuite revenue jumped 22%, a decrease from 23% in the previous period.

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