In an early interview, Clay Magouyrk, the executive vice president for Oracle Cloud, confidently stated that Oracle would be viewed as a cloud company in the next few years.
This prediction has proven true, as Oracle (ORCL)'s shares have soared approximately 110% since then. The company's focus on the cloud has paid off, driving their share price to record highs.
Check Out Video --> ORCL Price Analysis
The emergence of generative artificial intelligence (AI) has further fueled Oracle's growth. Oracle is expanding its enterprise software lineup by incorporating generative AI features, and it has partnered with Cohere, a startup specializing in large language models.Oracle's recent financial results have been impressive. During the fourth quarter, their cloud application business saw a 45% increase from the previous year, while their cloud infrastructure business experienced a significant 76% growth, accelerating from the previous quarter's 55% growth.
As a result, skeptics are reevaluating their stance on Oracle, and bullish investors are raising their price targets. Analysts such as Mizuho's Siti Panigrahi and Guggenheim's John DiFucci have increased their price targets to $150, demonstrating growing confidence in Oracle's future prospects.
Clay Magouyrk outlines Oracle's AI strategy in three layers. The first layer involves large-scale infrastructure for training and inferencing, leveraging Oracle's cloud capacity and partnership with Nvidia. The second layer combines large language models with industry expertise, with Cohere playing a crucial role. The third layer focuses on integrating generative AI into various applications, such as HR software, healthcare, and law enforcement.
Oracle plans to launch AI-enabled versions of its flagship apps in the near future, recognizing the value and demand for AI-driven solutions. The company aims to demonstrate its capabilities and capitalize on the market's enthusiasm for AI.
Magouyrk attributes Oracle's accelerated growth in the cloud business to its strong sales force, global reach, ample capital, and advanced technology. The company has successfully built momentum, proving the effectiveness of its cloud solutions.
In conclusion, Oracle's focus on the cloud has propelled its success, and its foray into generative AI positions the company for further growth. With impressive financial results, strategic partnerships, and a clear AI strategy, Oracle is poised to thrive in the evolving tech landscape.
(Disclaimer: ORCL is one of the stocks/ETFs we are currently trading/investing)
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