• Thu. Jan 23rd, 2025

1 Unstoppable Artificial Intelligence (AI) Stock to Buy Before 2024 Ends

1 Unstoppable Artificial Intelligence (AI) Stock to Buy Before 2024 Ends

Artificial intelligence (AI) has turned out to be a terrific catalyst for Oracle (NYSE: ORCL) in 2024, with shares of the cloud infrastructure and database software provider jumping 74% so far this year, as of this writing.

This impressive rise in Oracle stock isn’t surprising, as the company’s business has received a big boost because of the growing demand for its cloud infrastructure that’s being rented by companies to train and deploy AI models. The good part is that the robust demand for cloud AI services has allowed Oracle to build an impressive revenue pipeline, which is expected to drive a nice acceleration in the company’s growth.

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More importantly, the market for cloud-based AI services that Oracle’s cloud infrastructure is serving is currently in its early phases of growth. That’s precisely the reason why this AI stock may be able to sustain its impressive growth momentum in 2025, and beyond.

Here’s a look at the reasons why buying Oracle stock looks like a no-brainer.

During Oracle’s fiscal 2025 first-quarter results (ended Aug. 31) in September this year, it reported an 8% year-over-year increase in revenue to $13.3 billion. More importantly, the company said it expects fiscal 2025 growth to land in double digits on the back of solid growth in cloud infrastructure revenue.

Oracle’s full-year guidance suggests that its revenue growth is set to accelerate over the 6% improvement it witnessed in its top line in fiscal 2024 to $53 billion. So the company’s revenue should ideally hit $58.3 billion this year. The good part is that analysts are expecting Oracle’s revenue growth to accelerate over the next couple of fiscal years as well.

ORCL Revenue Estimates for Current Fiscal Year Chart
ORCL Revenue Estimates for Current Fiscal Year data by YCharts

It won’t be surprising to see the company indeed deliver what Wall Street is looking for. That’s because the company started the first quarter of fiscal 2025 with a 53% increase in its remaining performance obligations (RPO) to $99 billion. For comparison, Oracle’s RPO increased 44% in the fourth quarter of fiscal 2024.

The acceleration in this metric bodes well for Oracle, as the RPO refers to the future value of a company’s unfulfilled contracts. That figure could have been higher, but Oracle said the demand for cloud infrastructure services is outpacing supply. Not surprisingly, the company is looking to bring more capacity online, using Nvidia‘s graphics processing units (GPUs) to build huge data centers to help its customers train large AI models.

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