Oracle stock market has rallied about 50 percent YTD to trade around $122.22 during Wednesday’s after-hours.
Oracle Corporation (NYSE: ORCL) stock finally entered price discovery mode after trading below the ATH of the Dot-com bubble. Following the increased hype on generative artificial intelligence (AI), Oracle has found its cloud infrastructure in heightened demand for more use cases. As a result, ORCL shares have outperformed its peers apart from Nvidia Corporation (NASDAQ: NVDA) in the past year. According to the latest stock market update, ORCL shares have gained approximately 75 percent in the past year compared to 160 percent by NVDA in the same period.
Notably, Oracle outperformed some of its greatest rivals in the software-as-a-service including Salesforce Inc (NYSE: CRM), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com Inc (NASDAQ: AMZN). As a result, Goldman Sachs analysts upgraded Oracle’s stock market from Sell to Hold rating.
“The acceleration is a clear signal that Oracle’s advertised price/performance advantage vs. the hyperscalers is resonating with the market (both net new and existing customers), which should position the company for durable share gains despite its late entry into IaaS,” Goldman Sachs analysts led by Kash Rangan noted in their Oracle upgrade report.
Oracle Market Outlook and ORCL Stock’s Way to Its ATH
On June 12, Oracle announced its fiscal 2023 Q4 and full-year financial results that beat Wall Street’s expectations. During the quarter, the company announced a revenue of about $13.8 billion, up approximately 17 percent YoY. For the financial year 2023, the company announced a revenue of about $50 billion, up approximately 18 percent YoY basis.
According to Oracle CEO, Safra Catz, the exponential growth in the cloud applications and infrastructure business significantly contributed to the company’s record revenue in the financial year 2023.
“Our infrastructure growth rate has been accelerating – with 63% growth for the full year, and 77% growth in the fourth quarter. Our cloud applications growth rate also accelerated in FY23. So, both of our two strategic cloud businesses are getting bigger – and growing faster. That bodes well for another strong year in FY24,” Catz noted.
Similar sentiments were echoed by Oracle Chairman and CTO, Larry Ellison, who stated that the increased demand in the company’s Gen2 cloud by generative AI developers has turned bullish for the entire industry.
“Cutting edge companies doing LLM development such as Mosaic ML, Adept AI, Cohere plus 30 other AI development companies have recently signed contracts to purchase more than $2 billion of capacity in Oracle’s Gen2 Cloud,” Ellison noted.
Currently, Oracle is valued at approximately $315 billion with 2.7 billion shares outstanding. Notably, the company received an average target price of about $127 after being rated by 31 analysts. Additionally, the company received an average recommendation of Overweight from the same analyst.
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