By Zaheer Kachwala

(Reuters) – Oracle shares rose more than 10% on Tuesday as a push to embed artificial intelligence into its cloud service products boosted first-quarter results and helped the company narrow the gap with market leaders.

Although the company was late to the cloud business, its rapid AI investments have made its software an attractive option for companies looking to streamline their operations.

Revenue from its cloud products, considered a lower-cost option compared to Microsoft and Amazon, rose 21% to $5.6 billion in the first quarter, while total revenue of $13.31 billion beat estimates.

Analysts at Stifel expect Oracle’s revenue to continue to grow thanks to increasing bookings for AI infrastructure and collaboration with cloud services.

If current gains continue, Oracle is expected to increase its market value by around $39 billion. The company’s shares have risen more than 32 percent this year, while Microsoft and Amazon have gained 8 and 15 percent, respectively.

The stock is trading at a price-earnings ratio of 21.30. For Microsoft it was 29.81 and for Amazon it was 31.50. At least 10 brokerage houses have raised their price target for Oracle shares since Monday.

Oracle’s cloud infrastructure is also based on Nvidia hardware, which is considered the gold standard for AI chips.

Oracle is also working with rival cloud service providers to make it easier for its customers to link their data across providers. On Monday, the company announced a collaboration with Amazon Web Services, after signing a similar deal with Alphabet’s Google Cloud in June.

“Thanks to the help of all three big players (Azure, Google Cloud and now AWS as a partner), we will continue to see a nice increase in cloud revenue as well as an acceleration of growth thanks to the multi-cloud partnership,” Bernstein analysts said in a note.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Leroy Leo)