We recently published a list of Top 10 High Flying AI Stocks This Week. In this article, we are going to take a look at where Oracle Corporation (NYSE:ORCL) stands against other top high-flying AI stocks this week.
The US equity market is the most expensive it has ever been. After two years of blockbuster gains, most counters appear to be trading at all-time highs, leaving value investors with no option but to stay in cash. The eye-watering valuations have come against the backdrop of an artificial intelligence-driven rally.
The big question now is whether the AI-driven rally has come to an end, going by recent pullbacks across various counters. According to Morgan Stanley’s head of research, Katy Hubert, the AI-driven bull market is just getting started. Hubert is bullish in part because of where she thinks we are in the AI adoption and capital expenditure cycle.
“If we’re talking about ultimately a $10 trillion AI infrastructure investment, we’re at single-digit penetration today,” she said.
In terms of user adoption and business investment to expand the products, each technological development wave spanning decades is about ten times larger than the one before it. Given that about $10 trillion will need to be poured to accelerate developments around AI, the analyst expects the equity market to continue edging higher.
The fact that earnings revisions for the leading tech companies in the market still have a lot of upside potential when compared to the trajectory they took during the mobile internet cycle beginning in 2010 is another indication that we are still in the early stages of the AI cycle.
Building out infrastructure and training models to tackle tomorrow’s complex problems constituted the first wave of AI growth. With the continued infrastructure expansion, there is cause for optimism that AI will have another fantastic year.
According to Jensen Huang, upgrading the world’s $1 trillion worth of computers is necessary for accelerated computing, and it will take time. Furthermore, 2025 might be the year of agentic AI, or AI agents with the ability to reason, create solutions, and implement them. Businesses and industries may undergo radical change as a result of this and other practical applications.
As companies turn AI prototypes into products this year, cloud computing companies stand to gain from investments made in AI infrastructure over the past two years. However, it is not the only industry reaping the benefits of the AI revolution.
The fintech industry is expanding significantly due to technological advancements, artificial intelligence, and data analytics, especially in the banking, underwriting, legal, lending, risk, and treasury sectors. AI-powered banking solutions improve customer satisfaction, streamline processes, and facilitate in-the-moment decision-making. In return, they are giving rise to unique investment opportunities in the banking sector.
Our Methodology
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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).
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Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 91
Oracle Corporation (NYSE:ORCL) is a technology company that offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software is a service offering that includes various cloud software applications. On January 17, Cantor Fitzgerald reiterated an overweight stock rating, reiterating that the company is a top player in AI software and infrastructure.
According to the research firm, Oracle Corporation (NYSE:ORCL) is well-positioned to benefit from the growing demand for AI-powered cloud infrastructure. The firm expects the company’s OCI business to jump 60% in the second half of the year as more AI workloads move to its platform. Even though capital expenses are expected to weigh on margins in the short term due to increased investment, Cantor expects them to fuel long-term growth.
Oracle Corporation (NYSE:ORCL) inked a strategic partnership with Nvidia early this year. The deal paves the way for the two companies to join forces in transforming the way financial institutions operate by enhancing AI adoption. The two are to offer solutions at multiple levels, from infrastructure to software-as-a-service.
Overall, ORCL ranks 4th on our list of top high-flying AI stocks this week. As we acknowledge the growth potential of ORCL, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. 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.
