We recently compiled a list of the 11 Best Enterprise Software Stocks to Invest In. In this article, we are going to take a look at where Oracle Corp. (NYSE:ORCL) stands against the other enterprise software stocks.
Enterprise software comprises applications designed for large organizations, which enable them to manage functions like data analysis, sales, marketing, and customer service. These solutions prioritize scalability, high user capacity, and seamless integration with existing systems. Grand View Research reported that the global enterprise software market is valued at $263.79 billion as of 2024 and is expected to expand at a 12.1% compound annual growth rate from 2025 to 2030. North America accounted for 41% market share of the global enterprise software industry in 2024.
Key trends such as Industry 4.0, digitization, and the rise of connected devices add to the demand for automated and integrated solutions. The shift towards hybrid work models has increased enterprise software adoption in sectors like healthcare and education. In healthcare, enterprise software enhances hospital management and electronic health records. Data safety and privacy are vital market drivers as organizations prioritize protecting sensitive information and comply with GDPR and HIPAA regulations.
Cloud-based enterprise software is expected to dominate the market share by over 55% in 2024 due to its accessibility and affordability, while on-premise solutions will gain traction as organizations seek enhanced customization and data security. Large enterprises accounted for over 62% of the market share, driven by the need to manage complex workflows efficiently. The IT & Telecom sector led with over 20% market share in 2024.
On December 11, Liz Young Thomas, SoFi’s head of investment strategy, and Angela Mwanza, Rockefeller Global Family Office private advisor, joined CNBC’s ‘Closing Bell’ to discuss their market outlooks and address the recent performance of tech stocks. Mwanza expressed a strong bullish outlook for the software sector as they approach the new year. She noted that while mega-cap tech stocks are highly valued, this does not indicate that they are overvalued. She suggested rebalancing portfolios to reduce concentration in these large-cap names while recognizing their growth potential. She highlighted that over the last 6 months, the MAG7 stocks have lagged behind the broader S&P 500, indicating a market broadening that could favor software investments.
Thomas supported this bullish sentiment by emphasizing the resilience of software stocks amid recent volatility in momentum stocks, particularly high-growth names. Despite some mega-cap stocks seeing dramatic year-to-date increases, some up to 900%, others have struggled. Looking into 2025, Thomas predicted uneven performance within the tech landscape and advised investors to focus on software companies. She expressed a stronger bullish sentiment towards this segment, suggesting that software stocks are well-positioned for continued growth as they head into the new year.
Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the top enterprise software stocks. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of IT professionals meticulously crafting a large-scale enterprise performance management system.
Oracle Corp. (NYSE:ORCL)
Number of Hedge Fund Holders: 91
Oracle Corp. (NYSE:ORCL) is a software provider that offers comprehensive cloud solutions through Oracle Cloud Infrastructure (OCI), which provides a suite of cloud services, including computing, storage, and networking capabilities. Furthermore, its Roving Edge Infrastructure extends cloud capabilities to remote locations, enabling real-time data processing and analysis in limited connectivity.
Cloud services and license support segment encompass a range of offerings, including cloud computing services like Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), as well as the ongoing support and maintenance services associated with the company’s software licenses.
Cloud services, particularly within OCI, grew due to the increasing demand for AI workloads, the company’s competitive pricing and performance advantages, and the flexibility offered by its diverse deployment options. License support plays a vital role in ensuring the smooth and uninterrupted operation of Oracle software for customers.
In FQ2 2025, this segment generated $10.8 billion in revenue, reflecting a 12% year-over-year increase. This made up 77% of the total revenue generated in this quarter. This integrated approach enables Oracle Corp. (NYSE:ORCL) to meet the diverse needs of its customers, from providing cutting-edge cloud solutions to ensuring the seamless operation of their existing software investments.
Parnassus Value Equity Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q3 2024 investor letter:
“Oracle Corporation (NYSE:ORCL) announced second-quarter results that exceeded consensus expectations, driven by growth in its cloud infrastructure business, which is benefiting from demand for AI applications. Investor sentiment was further bolstered by the company’s announcement of a new partnership with Amazon.”
Overall ORCL ranks 4th on our list of the best enterprise software stocks to invest in. While we acknowledge the potential of ORCL as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
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Disclosure: None. This article is originally published at Insider Monkey.
