2024-05-26 08:30:00 ET
Summary
- My Oracle stock bearish thesis is increasingly less justified, as AI has proved more sustainable than anticipated.
- Oracle's earnings release in March underscores the continued growth in Cloud revenue.
- Oracle's fundamentally strong business model supports its drive to gain market share against its hyperscaler peers.
- However, over the past year, ORCL stock has failed to overcome the $130 resistance level.
- I argue why ORCL isn't a buy even though I'm no longer bearish. Waiting for a more attractive entry point is encouraged.
Oracle Stock's Bearish Thesis Less Justified Now
I must admit that my previous bearish thesis on Oracle Corporation ( ORCL ) failed to pan out, as the leading cloud computing and database management company has continued to outperform expectations. Even though Oracle's "monstrous" cloud infrastructure growth rate has decelerated, its robust backlog has remained highly resilient. Analysts have also revised their adjusted EPS estimates upward, underscoring its operating leverage improvement as it scales OCI further. Therefore, my bearish thesis hasn't been validated, as the AI growth momentum has proved more sustainable than anticipated....
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Oracle: Turbulence Avoided, Might Still Be Hard To Defy Gravity (Rating Upgrade)