In a significant development, Oracle Corp. experienced an 11% surge in its stock price after indicating that its cloud computing business is on the path of stabilization. The latest figures demonstrate progress in the company's endeavors to expand its market share in the highly competitive cloud computing market. The Austin-based company, renowned for its database software, is focused on growing its cloud infrastructure business to effectively compete against major players like Amazon.com Inc., Microsoft Corp., and Alphabet Inc.'s Google.

Oracle revealed that its cloud revenue saw a remarkable 25% jump to reach $5.1 billion in the quarter ending February. This surpassed the market estimate of $5.06 billion, impressing Wall Street analysts. Out of the total cloud revenue, $1.8 billion was generated from renting computing power and storage over the internet, while $3.3 billion came from applications.

Despite facing headwinds in recent quarters with slower growth rates, Oracle showcased signs of stabilization in the third quarter, as sales gained momentum almost at the same pace as the preceding three months. The quarter also witnessed a significantly higher remaining performance obligation of $80 billion, surpassing analysts' expectations of $59 billion. Oracle's Chief Executive Officer, Safra Catz, pointed to the figure as concrete evidence of customer momentum, attributing it to "large new cloud infrastructure contracts" signed during the third quarter. Catz further highlighted that Oracle is rapidly expanding its cloud data centers to meet the growing demand for its services.

The news of Oracle's strong performance in the cloud computing sector resulted in shares soaring to as high as $126.46 in extended trading. However, the stock had experienced a 10% decline over the past six months, underperforming the iShares software ETF, which recorded a 16% gain.

According to Jeffries analyst Brent Thill, Oracle's Q3 results were "better than feared." He also noted the positive outcomes reported by other cloud vendors like Amazon and Microsoft in recent times.

Apart from cloud computing, Oracle witnessed a 7.1% increase in total sales, reaching $13.3 billion — in line with analysts' estimates. When excluding some items, the company achieved a profit of $1.41 per share, surpassing the average estimate of $1.38.

The quarter also witnessed notable growth in specific segments of Oracle's business. Sales of Fusion software, used for managing corporate finance, saw an impressive 18% rise compared to the previous year. NetSuite, the enterprise planning tools aimed at small- and mid-sized companies, also experienced a revenue increase of 21%. Both these segments had achieved a 21% revenue gain in the previous period.

Additionally, Oracle's acquisition of Cerner, an electronic health records company, has steered the company towards modernizing its legacy software business. Oracle successfully moved the majority of Cerner customers to its cloud infrastructure in the quarter, as announced by Chairman Larry Ellison. Further updates, including a new suite of applications, are expected to transform Cerner and Oracle Health into a high-growth business in the coming years.

Overall, Oracle's strong Q3 performance, particularly in its cloud business, signifies positive growth and a potential contender in the highly competitive market.