The Pentagon awarded Oracle a 10-year software contract worth almost $7 billion, sending the stock up about 3% in extended trading. The deal spans the military, the intelligence community and the Coast Guard, and marks a big win for a stock down 38% this year.
The Pentagon on Thursday awarded Oracle a contract worth almost $7 billion over a decade, a big win for a software maker that investors have punished this year. The stock rose about 3% in extended trading.
What the contract covers
The agreement covers Oracle software running in on-premises data centers for branches of the military, the U.S. intelligence community and the Coast Guard. The Central Intelligence Agency was Oracle's first customer.
Awarded by the Naval Information Warfare Center Pacific, the deal is a single-award, ten-year procurement framework. It carries a base value of $3.31 billion over an initial five-year ordering period, with option years potentially lifting total spending to $6.99 billion. The deal deepens a supplier relationship with the department that stretches back to the 1990s.
The Defense Department's chief information officer, Kirsten Davies, said the change saves taxpayers at least $441 million "by fundamentally improving how we procure on-premises Oracle capabilities."
Shares down 38% this year
Investors have been unforgiving. Oracle shares are down 38% this year on worries that AI could erode growth for established software vendors. The company is also piling up tens of billions of dollars in debt to build AI data centers.
In June, Oracle said quarterly software revenue fell 2% from a year earlier. Cloud revenue, by contrast, climbed 47% as Oracle races to supply computing power to OpenAI and other clients. Oracle co-founder Larry Ellison, a longtime Trump supporter, reportedly gave $45 million to a nonprofit backing Trump's 2024 campaign.
Sources: CNBC, Investing.com
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