Why Wall Street Keeps Talking About ORCL — TradingView News

Oracle ORCL The stock faces competition from Google Cloud, Adobe Experience Cloud and Amazon Web Services in the cloud computing sector. It is among the cloud AI stocks competing in a growing market.

As such, investors shouldn’t be surprised to see ORCL stock up 40% year-to-date, even though that performance lags behind most of the market’s leading pure-play AI stocks.

Despite the challenges, Oracle continues to constantly innovate through strategic partnerships and its international expansion strategy.

This includes the company’s recent $1 billion investment in Spain. This new Cloud region in Madrid, developed with Telefonica España, aims to drive digital transformation.

Oracle’s focus on industry solutions (such as financial services) and its rising revenue (reaching $14.29 billion in the fourth quarter) highlight its adaptive strategy and growth in cloud services.

With its strong capabilities in cloud technology and AI, Oracle has become one of the leading players in the data center industry.

Oracle adds AMC virtual machine

Oracle recently launched AMD E5 Flexible Form Factors, VM. Standard. E5. Flex, for its database service, featuring 4th Generation AMD EPYC processors on Oracle Cloud Infrastructure.

These shapes support single-node or dual-node database systems with Oracle RAC, providing scalability from 1 to 64 OCPUs and up to 1 TB of memory per VM.

Network-attached block storage can reach 80TB with balanced or high-performance storage options, delivering up to 640,000 IOPS per virtual machine.

Each OCPU includes 1 Gbps of network bandwidth, scalable up to 40 Gbps for virtual machines with 40 or more OCPUs, optimizing costs based on workload demands.

Base Database Service ensures high application availability with a 2-node Oracle RAC configuration, ideal for maintenance updates and unplanned downtime.

It supports up to 128 OCPUs and 2TB of memory, offering Oracle Database Enterprise and Standard Editions 19c, 21c, and 23ai. Oracle Database 23ai enhances applications with AI capabilities such as AI Vector Search for advanced data analysis and productivity improvements across all user roles.

Oracle Database 23ai introduces JSON relational duality and operational property graph, simplifying data access and storage efficiency.

This enables developers to innovate with simplified APIs, supporting Oracle Database Enterprise and Standard Editions on flexible AMD, Intel, and Ampere form factors in Oracle Base Database Service for enhanced application development.

AI Growth and ORCL Stock Powered

Oracle has recently exceeded expectations for bookings and forged key partnerships with technology rivals, a strategic move that appears to be tied to Chairman Larry Ellison’s desire to reposition the software giant as a major player in the cloud computing segment.

Unsurprisingly, stocks hit record highs thanks to various announcements along the way.

Known for its database software, Oracle is actively expanding its cloud infrastructure unit to compete with big tech companies.

Although this segment contributes only a small share of total revenue, investors consider it essential for ORCL stock’s future growth strategy.

Company CEO Safra Catz highlighted record sales driven by large AI language models in Oracle Cloud, forecasting double-digit revenue growth through May 2025.

Oracle has expanded its cloud partnerships with Google and Microsoft MSFTthereby improving its database growth profile.

OpenAI selected Oracle to bolster its cloud capability, underscoring its progress in AI. Ellison highlighted Oracle’s central role in AI technology during the fourth-quarter results.

Announcement of the first LLM in data

On June 26, Oracle launched HeatWave GenAI, which delivers the industry’s first in-database large language models (LLMs), automated in-database vector storage, scalable vector processing, and contextual natural language conversations using unstructured content. This innovation enables enterprises to seamlessly integrate generative AI into their data across Oracle Cloud regions, eliminating the need for separate AI databases.

Heatwave GenAI has streamlined enterprise data management by allowing developers to create a vector store for unstructured content with a single SQL command and built-in embedding models. It enables direct natural language searches using in-database and external language models, preserving data integrity in the database without GPU configuration. These simplified operations improve performance, strengthen data security, and effectively reduce operational expenses.

ORCL Stock Remains a Solid Buy

Analysts believe that ORCL stock could definitely see a bigger upside from here. I agree.

The company’s fundamentals certainly seem to point in that direction. Oracle’s cloud revenue jumped 20% to $5.3 billion in the fourth quarter, driven by strong performances in its IaaS and SaaS businesses. IaaS sales rose 42% to $2 billion, while SaaS revenue grew 10% to $3.3 billion, effectively meeting market demands. The company’s cloud services and license support division delivered a gross margin of 77%, indicating a shift toward higher-margin services.

Non-GAAP operating income was $6.7 billion, up 9% from the prior year. Operating margin improved to 44% from 47%, reflecting Oracle’s successful business development amid growing cloud revenue.

As long as these fundamentals continue to move in this direction, this is a stock with partnerships and product enhancements that could be poised for a big upside.

As of the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love of investing led him to earn an MBA in Finance and hold several leadership positions in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, combined with his passion for finding undervalued growth opportunities, contribute to his conservative, long-term investment outlook.

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