Oracle: Hidden Star in the Stock Market Sky 2024

Oracle reveals itself as an unexpected high-flyer on the stock market in 2024, now drawing the attention of Wall Street. The shares have risen by 61% so far and remain available at a reasonable price. A crucial factor in the company's success lies in its leading position in the field of artificial intelligence, recently bolstered by a convincing quarterly report. Oracle, known for its software products used globally by companies for more effective data management, including solutions for enterprise resource planning and customer relationship management, presents itself as a well-managed traditional company. Particularly impressive is the expansion of AI-related businesses, an impressive cash flow generation, and the current valuation even after the substantial price rally. The company's recent quarterly report indicates its growing significance in AI investments. Oracle recorded earnings of $1.03 per share on revenues of $13.3 billion in the first quarter of 2025, with particularly impressive growth in cloud services revenue up 21% compared to the previous year. Hyperscalers are increasingly relying on Oracle's products, underscored by unpaid revenues exceeding $99 billion. A significant partnership with Amazon Web Services, along with existing alliances such as Microsoft and Alphabet, enhances Oracle's database solutions cloud implementations. Another positive aspect is the robust cash flow generation. In the first quarter of 2025, the operating cash flow increased to $7.42 billion. Despite net debt exceeding $75 billion, this is offset by strong revenues. Oracle efficiently converts its earnings into free cash flow, thereby managing increased investments as well. The current valuation seems fair, and the market continues to seek growth opportunities in the context of AI initiatives. Analysts forecast a 24% earnings increase for the current year, while the valuation remains stable at 26.5 times this year's earnings forecast. The presented revenue forecasts through 2029 support the outlook for continued growth. With a broader consensus rating of "Moderate Buy" and an average price target implying a moderate upside of 6.4%, Oracle remains an exciting option for investors. The company's fundamental strength and emerging developments in the cloud infrastructure sector suggest potential for further growth in the long term.