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12. Oracle Corporation (NYSE:ORCL)

Number of Hedge Fund Holders: 105

During the segment where Jim Cramer talked about struggling enterprise software businesses, Oracle Corporation (NYSE:ORCL) was also named. He pointed to weakening fundamentals and a cancelled federal contract as a red flag. He noted:

“Oracle and Salesforce peaked back in December; they’re now down almost 30% from their highs. […] The Department of Defence said it would cancel an Oracle contract to modernize the Pentagon’s HR system. There’s some hope that Oracle could recover the contract, but that could be roughly $100 million in annual recurring revenue down the drain. Sure, that’s a rounding error for Oracle, a company that’s expected to bring in more than $57 billion in revenue this year, but it’s a warning sign for the industry.”

While Oracle Corporation (NYSE:ORCL) remains a major player in enterprise software and cloud infrastructure, its exposure to government contracts and legacy systems could pose growth challenges due to changing IT budgets by the Department of Government Efficiency (DOGE).

Polen Capital stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q4 2024 investor letter:

“We added to several existing positions in the quarter including Oracle […] Oracle was a recent addition to the portfolio last quarter, and results so far indicate an accelerating trajectory that we expect will continue for many years. The company’s OCI (Oracle Cloud Infrastructure) cloud infrastructure business enjoys large and durable advantages and is seeing much demand for normal cloud workloads with generative AI training and inference workloads as nice potential optionality on the upside.”