3. Oracle Corporation (NASDAQ:ORCL)
Number of Hedge Fund Investors: 93
Jim Cramer highlights that Oracle Corporation (NASDAQ:ORCL) has successfully reinvented itself by adding a strong AI component to its existing enterprise software business. He notes that Oracle Corporation (NASDAQ:ORCL)’s performance has been exceptional in recent quarters and believes the company will continue this trend. Cramer suggests that Oracle Corporation (NASDAQ:ORCL) could play a significant role in stabilizing the tech sector.
“Oracle has reinvented itself with an AI kicker to go with its regular enterprise software business. As of last quarter, it’s been performing exceptionally well, and I think they’re going to do it again. Oracle Corporation (NASDAQ:ORCL) could stop the tech blood flow.”
Oracle Corporation (NASDAQ:ORCL) is well-positioned for growth, particularly due to its strong performance in cloud infrastructure amid rising AI demand. Oracle Corporation (NASDAQ:ORCL)’s Oracle Cloud Infrastructure (OCI) is a key asset, attracting major clients such as NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and OpenAI. OCI’s ability to efficiently train large language models at lower costs gives Oracle a significant edge in the competitive AI market.
Moreover, Oracle Corporation (NASDAQ:ORCL)’s autonomous database systems improve efficiency and reduce costs for its clients. Looking ahead to Q1 2025, Oracle Corporation (NASDAQ:ORCL) is projected to see a 6% increase in revenue, reaching approximately $13.23 billion, driven mainly by its cloud services. Oracle Corporation (NASDAQ:ORCL) expects OCI to grow by over 50% year-over-year in fiscal 2025, reflecting strong demand for its AI-related offerings.
Additionally, Oracle Corporation (NASDAQ:ORCL)’s performance obligations have surged by 44%, suggesting a healthy future revenue pipeline. Despite a high debt load, Oracle Corporation (NASDAQ:ORCL)’s aggressive expansion in cloud infrastructure and its ambitious goal of $65 billion in revenue by 2026 provides a positive outlook. Although Oracle Corporation (NASDAQ:ORCL) has gained more than 35% this year and valuation concerns exist, analysts remain confident in the continued strong demand for Oracle’s cloud solutions, making it an attractive investment.
Ariel Focus Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q2 2024 investor letter:
“Global leader in enterprise software, Oracle Corporation (NYSE:ORCL), was the top contributor to relative performance in the period. ORCL is benefitting from a significant expansion in artificial intelligence (AI) demand and strong booking growth with OpenAI. We believe these results highlight ORCL’s ability to effectively cross-sell and upsell apps and infrastructure, as well as the emergence of the company’s cloud platform as a competitive offering.
In addition, ORCL announced a meaningful partnership with Google Cloud mirroring its existing partnership with Microsoft Azure. The company’s ability to leverage the services of both companies without having to rewrite the application helps differentiate and improve ORCL’s positioning in the database market. Furthermore, management provided strong guidance for fiscal 2025, including a double-digit increase in total revenue, with growth accelerating throughout the year.”
