(ORCL), (NVDA), (MSFT)
The artificial intelligence (AI) arena is undeniably pulsing with potential, promising to be the most transformative tech wave in history.
These days, it’s no longer just about the smart gadgets. We're talking about machines that can outpace and outperform humans in jobs ranging from drafting intricate documents to conjuring up code — all in the blink of an eye.
If you listen closely to the chatter along Wall Street, you'll catch whispers of AI's potential to inject anywhere from $7 trillion to a staggering $200 trillion into the global economy over the next decade.
Now, we all know that Nvidia (NVDA) has been basking in the limelight as the golden child of the AI saga, thanks to its data center chips that have become the backbone for nearly every major AI breakthrough.
This chip titan has seen its market value balloon to an eye-watering $1.8 trillion, with a jaw-dropping $1 trillion of that amassed in just the last year.
While Nvidia continues to ride high on AI's tidal wave, let me turn your attention to another contender quietly gearing up in the AI arena: Oracle (ORCL).
Founded back in the serene tech landscape of 1977, Oracle first made its mark with its database management software.
Fast-forward to today and Oracle is flexing its muscles in the cloud computing race with its Oracle Cloud Infrastructure (OCI), which spans 66 global data centers.
But, it looks like Oracle is not stopping there. The company is currently in the throes of a massive expansion, adding 100 more data centers to meet the surging demand for AI infrastructure.
In fact, the company shared that their Nvidia GPU cluster tech is setting new industry benchmarks, enabling developers to train AI models with unmatched speed and cost-efficiency.
Dubbed the Gen2 Cloud, Oracle's latest data center evolution centers on automation, promising operational savings that are passed down to customers.
This next-gen cloud has become a magnet for leading generative AI startups such as Cohere, Adept AI, and even Elon Musk's xAI, which have pledged billions towards Gen2's capacity.
Despite its strides in AI, Oracle hasn't quite captured the investor frenzy like some of its peers. While its stock has seen a healthy 30% jump over the past year, it's still in the shadow of Nvidia's meteoric rise.
But, Wall Street has been eyeing Oracle with an optimistic lens, signaling a 14% upside potential. Actually, most industry experts are excited over Oracle Cloud's growth, partly fueled by generative AI customers and the push for sovereign clouds.
Unlike the AI stock craze, Oracle's shares are a breath of fresh air for investors seeking AI exposure without the hefty price tag, trading at just 17.3 times expected earnings. That makes it a tempting investment for anyone looking to take a piece of the AI action.
So, what's the verdict on Oracle?
Well, Oracle is undoubtedly a significant player in its league. Yet, it's not in the same fast lane as tech giants like Microsoft (MSFT) or Nvidia when it comes to AI's dazzling prospects.
The company’s growth, pegged at a respectable 7% to 9% for earnings and revenue in the upcoming year, doesn't really spark the same excitement as its high-flying counterparts.
That said, Oracle presents a solid investment case with its sensible valuation, but it might not be the showstopper in your tech portfolio.
Other tech behemoths, boasting a more vibrant mix of growth and valuation, might edge out as more enticing picks. Given Oracle's shares are hovering near their peak and have rallied 30% in the last year, a strategic pause might be wise.
A more attractive entry point could emerge, offering a golden opportunity to bet on Oracle's quiet but steady march in the AI revolution. For now, simply add this stock to your watchlist.
