Oracle's cloud services segment is growing and strengthening strategic alliances, with expected revenue growth.

From Nasdaq: 2024-06-18 11:18:00

Investors are weighing the decision to invest in Oracle (ORCL) as the company shifts focus to cloud-based solutions. In fiscal 2024, Oracle’s cloud services segment brought in $39.3 billion, comprising 74% of total revenue. For fiscal 2025, cloud revenues are expected to grow 21-23% in constant currency and 20-22% in dollar terms.

Oracle is strengthening strategic alliances with tech giants like Microsoft and Google Cloud to expand its top-line growth. Oracle expects total revenues for the first quarter of fiscal 2025 to increase by 6-8% in constant currency. The consensus estimate for fiscal 2025 revenues is $57.45 billion, showing 8.5% year-over-year growth.

Oracle is focusing on AI solutions and product integration as a growth catalyst. The company’s AI strategy includes machine learning, natural language processing, and computer vision. Recent AI innovations include the Oracle APEX AI Assistant for simplified application development. Oracle is also partnering with companies like SambaNova Systems and NVIDIA to enhance AI capabilities.

Despite its AI advancements, Oracle faces fierce competition in the cloud market from tech giants like Microsoft, Amazon, and Google. ORCL is trading at a premium with a trailing EV/EBITDA of 19.2X. With a Zacks Rank #3 (Hold), investors should wait for a better entry point into Oracle. Shares of ORCL have gained 33.1% year to date.



Read more at Nasdaq: Does Oracle’s (ORCL) Cloud Strength Make It Worth Buying Now?