PLTR - Oracle Has A Long Growth Runway For OCI
2024-06-12 09:10:28 ET
Summary
- Oracle Corp. reported strong growth in cloud services, with adjusted operating margin and aEBITDA margin expanding to 44% and 55%, respectively.
- Oracle executing exceptionally well in building out their large, modular, and scalable AI factories as they attempt to keep pace with customer demand.
- Oracle disclosed a deal with OpenAI to build 4 new data centers to cater to training neural networks. I believe that these will likely use Nvidia's new Blackwell GPUs.
Oracle Corp. ( ORCL ) reported a strong end to FY24 with cloud services driving significant growth at the top line. This growth was paired with strength in margins with Oracle’s adjusted operating margin and aEBITDA margin expanding to 44% and 55%, respectively, showing the durability in scaling OCI across the firm’s operations. Using management’s commentary as a guide, I believe Oracle can continue this exceptional growth rate as the firm continues to build larger and larger data centers with one being constructed with 1GW in capacity, the size of a city. Given the firm’s growth rate and operational excellence, I reiterate my STRONG BUY recommendation with a price target of $194/share at 16.91x FY26 EV/aEBITDA....
Oracle Has A Long Growth Runway For OCI