Oracle's stock has risen 31.4% YTD, driven by investments in AI technologies

From Nasdaq: 2024-07-22 10:48:00

Oracle’s stock price has surged 31.4% year to date, outperforming the tech sector. The company’s focus on AI technologies is driving growth, with cloud infrastructure and databases geared for AI integration. Investors await next earnings report for proof of AI impact, watching for cloud revenue and customer growth.

Oracle is heavily investing in AI technologies across its products, including machine learning and natural language processing. The Autonomous Database is a significant development in automating critical tasks. The company recently launched Exadata Exascale for high-performance data processing. Oracle is also enhancing AI in its APEX platform for simplified app development.

Strategic partnerships with key players like Palantir and collaborations with SambaNova Systems and NVIDIA are set to strengthen Oracle’s AI capabilities. Investors are divided on Oracle’s future growth potential driven by AI, with bulls optimistic about revenue growth and improved margins. The company’s fiscal 2025 estimates signal positive growth, but bears caution about valuation and competition from tech giants.

The global cloud services market is dominated by AWS, Google Cloud, and Microsoft Azure, posing a challenge for Oracle’s AI offerings to stand out. Oracle’s stock is trading at a premium compared to industry peers, reflecting a stretched valuation. Investors are advised to wait for a better entry point to capitalize on Oracle’s future growth potential. Oracle currently holds a Zacks Rank #3 (Hold) status.



Read more at Nasdaq: Oracle (ORCL) Rises 31.4% YTD: Can AI Push Drive It Higher?