3. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Investors in Q2 2024: 93
Short Interest as % of Shares Outstanding: 0.68%
Oracle Corporation (NYSE:ORCL) is one of the biggest enterprise software providers in the world. This also makes it a key cloud computing firm, particularly due to its enterprise resource management software, programming language, and database products. All of Oracle Corporation (NYSE:ORCL)’s products are software, and it has also established a key role in the AI industry through providing infrastructure as a service (IaaS). A multitude of firms, including Tesla and OpenAI, have either used or are using Oracle Corporation (NYSE:ORCL) owned NVIDIA GPU clusters which provide it a key competitive edge due to the tight supply of the latest chips. The firm is also undergoing a key shift these days by migrating its database customers to the cloud via deals with Microsoft, Amazon, and Google. This creates an opportunity for sizeable support revenues for Oracle Corporation (NYSE:ORCL), which is a high margin income stream that adds to a bullish hypothesis. The firm’s IaaS business, called Oracle Cloud Infrastructure (OCI) has injected fresh and fast growth into its business, especially for the deals that Oracle Corporation (NYSE:ORCL) has signed but not recognized revenue from.
Oracle Corporation (NYSE:ORCL)’s billionaire founder Larry Ellison shared key facts for these deal RPOs (remaining performance obligations) during the Q4 2024 earnings call:
“Thank you, Safra. I’m going to start by repeating something Safra said. In Q4, Oracle’s company-wide RPO increased 44% to $98 billion. In AI alone, we signed contracts with 30 different customers for $12.5 billion in new AI business. These astonishing RPO numbers 44% and $98 billion were driven by massive increases in sales of Oracle Cloud Infrastructure, OCI. So who are the companies choosing to use Oracle Cloud Services and Oracle data centers. Well, here are a few names: NVIDIA, Microsoft, Google, X AI, Open AI, coherent dozens more. In other words, the world’s largest cloud companies and the world’s most successful and accomplished AI companies choose to use Oracle cloud services and data centers. So can — so why are they working with Oracle, because Oracle’s Gen 2 cloud infrastructure is different.
OCI’s area network moves data much faster. And when you charge by the minute, faster also means less expensive. OCI trains large language models several times faster and at a fraction of the cost of other clouds. OCI’s Critical cloud software, the operating system and the database are fully Autonomous. At OCI, human beings do not run the operating system or the database, Autonomous software robots do. No one else has this level of autonomy in the cloud. Eliminating human labor eliminate human error. Almost all cloud security breaches begin with human error, eliminating the possibility of human error is the only way to make certain your cloud data is not stolen. That’s it. The most important technology companies in the world are using OCI because it’s faster, less expensive and more secure.”
