Jim Cramer’s Top Stock Picks: 10 Stocks with High Potential

3. Oracle Corporation (NASDAQ:ORCL)

Number of Hedge Fund Investors: 93

Jim Cramer reported that Melius Research has upgraded Oracle Corporation (NASDAQ:ORCL) to a buy rating from hold, following a strong earnings report driven by AI and an increase in long-term guidance. Although Oracle Corporation (NASDAQ:ORCL)’s stock has already risen 54% this year and 14% just last week, analysts believe the stock could still have more room to grow. They emphasized that Oracle Corporation (NASDAQ:ORCL) is essential for hyperscalers, and this might be just the beginning of its upward move.

“Melius Research upgraded Oracle to buy from hold after last week’s strong AI-fueled earnings report and long-range guidance hike. Analysts acknowledged some might think it’s a late call for a stock up 54% year to date and 14% last week alone, but they countered by writing that “we could be just in the middle of a move.” The hyperscalers need Oracle.

Oracle Corporation (NASDAQ:ORCL) is a strong investment choice due to its significant growth in cloud infrastructure and database services, driven by strategic investments in AI and partnerships with major players like AWS, Microsoft, and Google. In Q1 FY2025, Oracle Corporation (NASDAQ:ORCL) reported a 6.9% year-over-year increase in revenue to $13.31 billion, exceeding analyst expectations.

Cloud infrastructure revenue surged by 45%, reflecting Oracle Corporation (NASDAQ:ORCL)’s successful transition of legacy database customers to cloud-based solutions. Oracle Corporation (NASDAQ:ORCL)’s expansion in cloud services, particularly Infrastructure as a Service (IaaS), which grew 42% year-over-year, and its $12 billion in AI-related contracts highlight its strong position in these markets. Oracle Corporation (NASDAQ:ORCL) also projects annual revenue of at least $104 billion by FY2029, indicating robust future growth.

With a high gross margin of 77% in its cloud segment and improved operating margins, Oracle Corporation (NASDAQ:ORCL) is expected to achieve double-digit EPS growth in FY2025. This makes the stock an attractive investment, with a forward valuation of 21x earnings. Overall, Oracle Corporation (NASDAQ:ORCL)’s strategic focus, financial performance, and growth potential make it a compelling long-term 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.”