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The market misunderstood Oracle, analyst says

  • Oracle's stock surged in after-hours trading following an earnings report that trumped Wall Street's expectations.
  • An analyst on CNBC's "Closing Bell" says strong earnings will continue to fuel markets' growth this year.

The market misunderstood Oracle, which reported encouraging results after the bell Wednesday, an analyst said Wednesday.

"As long as the cloud starts to grow faster than the core model, or the core business is deteriorating, that's good for Oracle," Wells Capital's Ann Miletti said on CNBC's "Closing Bell."

Oracle beat earnings estimates for its fiscal fourth quarter and saw shares pop as much as 9 percent in after-hours trading.

Miletti said that Oracle needs its growth to continue "on the cloud side," saying the company needs "to see it translate into earnings growth," something which she believes Oracle has not gotten yet.

Meanwhile, another analyst said that good earnings growth is the key to the market's continued success for the rest of the year.

"We started to see it in the first quarter and we think it can continue here in the second quarter when results come out in a few weeks," Eric Marshall, director of research for Hodges Funds, said on Closing Bell.

Marshall emphasized that sectors lagging in the current market, such as consumer discretionary and financials, may see a boost in the latter half of the year. He cited Tower Semiconductor and Eagle Materials as two examples of companies which he believes will get a boost soon.