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Oracle Corporation (ORCL), headquartered in Austin, Texas, offers products and services that address enterprise information technology environments. The company is valued at $521.5 billion by market cap, and its software runs on network computers, personal digital assistants, set-top devices, PCs, workstations, minicomputers, mainframes, and massively parallel computers.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and ORCL definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the software infrastructure industry. Oracle's emphasis on emerging technologies, specifically AI, has positioned it as a leader in innovation. The Oracle Autonomous Database, with its advanced machine learning features, showcases the company's dedication to providing state-of-the-art solutions. By prioritizing innovation, Oracle not only improves its product portfolio but also enhances efficiency and customer satisfaction, strengthening its competitive edge.
Despite its notable strength, ORCL slipped 5% from its 52-week high of $196.04, achieved on Nov. 21. Shares of ORCL rose 30.6% over the past three months, outperforming the Technology Select Sector SPDR Fund’s (XLK) 14.6% gains during the same time frame.
In the longer term, shares of ORCL rose 76.7% on a YTD basis and climbed 62.6% over the past 52 weeks, outperforming XLK’s YTD gains of 24.6% and 30.1% returns over the last year.
To confirm the bullish trend, ORCL has traded above its 200-day moving average since mid-March. The stock has been trading above its 50-day moving average since late August.
The success of Oracle can be credited to the increasing demand for artificial intelligence (AI) applications and cloud services. Oracle's strategic decision to expand its cloud data centers and secure significant new GPU contracts aligns perfectly with the growing need for AI solutions, solidifying its presence in the competitive cloud market.
On Sep. 9, ORCL shares closed down more than 1% after reporting its Q1 results. Its adjusted EPS came in at $1.39, up 16.8% year over year. The company’s revenue increased 6.9% year over year to $13.3 billion.
ORCL’s rival, Fortinet, Inc. (FTNT) shares lagged behind the stock, with a 68.2% gain on a YTD basis and 87.5% returns over the past 52 weeks.
Wall Street analysts are moderately bullish on ORCL’s prospects. The stock has a consensus “Moderate Buy” rating from the 30 analysts covering it. While ORCL currently trades above its mean price target of $181.36, the Street-high price target of $216 suggests an upside potential of 16%.
