We recently compiled a list of the 10 Best Cloud Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where Oracle Corp (NYSE:ORCL) stands against the other cloud stocks.
Based on a report by MarketsandMarkets, the global cloud industry in 2025 is projected to grow by 15.1% to $1,256.8 billion. While 2024 was marked by high adoption by the BFSI sector, the year ahead should see applications being developed that meet the unique specifications of each industry. North America and Europe should capture the bulk of the market size but APAC is expected to register the fastest growth. The integration of AI with cloud platforms accompanied by new service models is another key development expected to shape this industry.
Cloud ETFs have generated generous returns of 2.74%, 28.54% and 11.00% for 1-month, 6-month and 1-year tenors. One would assume that the underlying stocks would continue to perform well, propelled by strong industrial tailwinds.
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For this article we picked 10 cloud stocks trending on latest news. With each stock we have mentioned the number of hedge fund investors. 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 Corp (NYSE:ORCL)
Number of Hedge Fund Investors: 91
Oracle Corp (NYSE:ORCL) recently announced a $100 billion JV with SoftBank and OpenAI to fund the expansion of data centers in a bid to emerge as a big cloud player. ORCL currently has only a 5% share in this space, falling far behind AWS (40%) and Microsoft (16%). The expected capex should enable ORCL to generate $30-40 billion in revenue from cloud infrastructure sales, a 3-4 fold increase from its current sales of $10 billion.
Bloomberg Consensus estimates that the cloud business will outpace ORCL’s overall growth, with the earnings expectation already up by 0.2%. The firm has already made inroads in enabling countries like the UAE and Saudi Arabia to enhance their cloud adoption. There is also a plan to train 350,000 people in the Middle East that would enable governments and businesses to leverage cloud systems with AI capabilities. The investment in this region is expected to be 5 times higher in the next few years.
Overall ORCL ranks 6th on our list of the best cloud stocks to buy according to hedge funds. While we acknowledge the potential of ORCL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher 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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
