1. 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.
While we acknowledge the potential of Oracle Corporation (NYSE: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’.
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