Jim Cramer’s Latest Watchlist: 10 Stock Picks You Need to Know

3. Oracle Corporation (NASDAQ:ORCL)

Number of Hedge Fund Investors: 93

Jim Cramer highlighted a recent positive report from Oracle Corporation (NASDAQ:ORCL), noting that much of the good news is tied to the expansion of AI data centers. Cramer believes that the sell-off in chip stocks has been overdone, as the reasons for favoring this sector earlier in the year still hold true. He emphasized that the surge in AI spending is genuine, with significant investments in building the necessary infrastructure, as demonstrated by Oracle Corporation (NASDAQ:ORCL)’s latest results.

“This very evening, we got a startlingly good report from Oracle. A lot of the good news came in concert with data centers for AI. Hey, not bad! In the end, I think the chip stocks have sold off way too hard. Every reason we had to like this group earlier this year remains intact. The AI spending boom is very real, and there’s a ton of money being spent to build out the infrastructure, as we heard from Oracle this evening.

More importantly, there’s more to chips than AI. For the past couple of quarters, we’ve been exiting a period of oversupply in the semiconductor market, and we’re now finally seeing some excellent sales growth. Yes, we’re past the point of equilibrium—we’re going up!”

In Q1 2024, Oracle Corporation (NASDAQ:ORCL)’s earnings rose to $2.93 billion, or $1.03 per share, surpassing expectations. Its adjusted earnings of $1.39 per share also beat forecasts of $1.32. Revenue grew by 6.9% to $13.31 billion, driven mainly by its cloud services. The cloud segment, boosted by the acquisition of Cerner Corporation (NASDAQ:CERN), saw a 20% increase year-over-year, reaching $5.3 billion. Oracle Corporation (NASDAQ:ORCL)’s Infrastructure as a Service (IaaS) experienced a remarkable 42% growth, highlighting its successful focus on high-demand cloud and AI services.

Additionally, Oracle Corporation (NASDAQ:ORCL) has secured over $12 billion in AI contracts, positioning itself strongly in the AI field. Oracle Corporation (NASDAQ:ORCL)’s future revenue prospects are supported by a substantial $98 billion in remaining performance obligations. With its leadership in cloud technology and expanding AI contracts, Oracle Corporation (NASDAQ:ORCL) is set for continued growth, making it an attractive investment.

Carillon Eagle Growth & Income Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q2 2024 investor letter:

“Oracle Corporation (NYSE:ORCL) stock rose to all-time highs after the company announced better than expected cloud infrastructure revenue. Oracle signed dozens of new customers, including two leaders in generative artificial intelligence. The backlog remains, and strong growth appears poised to accelerate.”