We recently published an article titled, Jim Cramer’s Latest Lightning Round: 12 Stocks to Watch. In this article, we are going to take a look at where Oracle Corporation (NYSE:ORCL) stands against other stocks discussed by Jim Cramer during the latest lightning round.
On Tuesday, Jim Cramer, host of Mad Money, shared his thoughts on the market’s recent volatility and offered advice to investors regarding earnings reports. He cautioned against making trades based solely on immediate stock reactions following earnings announcements, as many of these movements might not be justified.
“The absurdity of earnings season has arrived. It didn’t take long, did it? People are already doing stupid things. And you know what? I gotta point them out to you so that you don’t make the same mistakes.”
Cramer emphasized his mission to guide individuals toward becoming more thoughtful investors, rather than impulsive traders. He noted that the Dow Jones Industrial Average dropped 325 points, while the S&P 500 declined by 0.76%, and the Nasdaq Composite fell 1.01%.
Cramer referred to this phenomenon as part of what he calls the quarterly repricing process, which is the earnings season. He explained that, typically, most stocks tend to move in tandem with the S&P 500 unless a significant event alters the market. In the absence of such an event, stock movements are often influenced by external factors that may have only a tenuous connection to a company’s actual future performance. He further clarified his perspective and stated:
“Now, I want to make one thing clear. I’m not saying that everybody’s a moron. I’m saying there are details that inform people are looking for benchmarks we’ve accepted going into earnings. Yet for the first few moments of trading, there’s just obviously oblivious action based on who knows what. It’s definitely not the key metrics. It’s definitely not the homework.”
Ultimately, Cramer described this chaotic trading behavior as a clumsy way for Wall Street to reassess stock prices in relation to their peers, driven by a flurry of parsed headlines during earnings season. He expressed relief that this sort of disorganized trading only occurs four times a year, even as he acknowledged that this is a crucial period when a stock can become detached from the S&P 500.
Concluding his thoughts, Cramer emphasized:
“Yet, if you’re not a professional, you should not be involved in this process. There are so many people playing with so much money, professionals who pay people fortunes to figure this stuff out. Let them fight to set the price. For regular investors like you, trying to trade that initial post-earnings action is just an easy way to lose money, four times a year, like clockwork.”
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Cramer during lightning rounds of Mad Money’s episodes on October 14, 15, and 16. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Cramer On Oracle Corporation (NYSE:ORCL): ‘I Like The Prospects’
Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 93
A caller referred to Jensen Huang’s, NVIDIA’s CEO, comment about the healthcare segment having a huge opportunity for AI and asked whether Cerner would be a needle mover for Oracle Corporation (NYSE:ORCL). Here’s what Cramer said in response:
“Cerner has not been a big payoff off yet…I think that Oracle is going to be working with Jensen. So I like the prospects, but you’re in it for the data center and data center business is excellent.”
Oracle (NYSE:ORCL) offers a diverse portfolio of products and services designed to meet the needs of organizations worldwide. Its cloud offerings include various applications for enterprise resource planning (ERP), healthcare management, and supply chain logistics, alongside essential infrastructure technologies such as databases and middleware. In a significant move in 2021, the company announced its acquisition of Cerner Corporation, a leading digital information systems provider for hospitals and healthcare systems. The all-cash tender offer valued at approximately $28.3 billion aimed to integrate Cerner’s advanced capabilities into Oracle’s health solutions.
The company got an extension in its contract to modernize the electronic health records (EHR) system for the U.S. Department of Veterans Affairs (VA) across its 172 facilities. However, in June, Bloomberg reported challenges with the software’s effectiveness in improving patient care, particularly from the VA, which is its primary public client in the healthcare segment. This has raised concerns about the performance of the Cerner division, leading to expectations of revenue decline in the fiscal year.
It should be noted that Oracle (NYSE:ORCL) continues to innovate in the technology space, as demonstrated by its introduction of the world’s first zettascale cloud computing cluster powered by NVIDIA Blackwell GPUs in September. The groundbreaking development allows Oracle Cloud Infrastructure (OCI) to offer the largest AI supercomputer available in the cloud, capable of supporting an impressive 131,072 NVIDIA GPUs.
In October, the company revealed plans to invest over $6.5 billion in artificial intelligence and cloud computing in Malaysia. It will establish a cloud region that offers cutting-edge AI technologies, featuring the largest AI supercomputer available in the cloud. Out of the many services, users will have the option to choose configurations with up to 131,072 NVIDIA Blackwell GPUs, complemented by NVIDIA ConnectX-7 NICs for RoCEv2 networking, or opt for NVIDIA GB200 NVL72 rack solutions that utilize liquid cooling and NVIDIA Quantum-2 InfiniBand networking.
Overall, ORCL ranks 1st on our list of stocks discussed by Jim Cramer during the latest lightning round. While we acknowledge the potential of ORCL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ORCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.