We recently published a list of 10 Most Profitable Tech Stocks to Buy Now. In this article, we are going to take a look at where Oracle Corporation (NYSE:ORCL) stands against other most profitable tech stocks to buy now.
Profitability remains one of the most sought-after traits in the technology sector, yet it is also one of the most complex. It is shaped by a delicate balance of investment cycles, competition, and market perception. While topline growth often takes center stage—driving valuations and attracting top talent—sustained profitability becomes crucial as industries mature, competition peaks, and new investments become necessary for survival. In this ever-evolving landscape, technology companies have mastered the art of balancing revenue expansion with profit growth by diversifying their businesses, building vast customer ecosystems, and continuously enhancing product experiences.
Looking ahead, earnings growth will take on an even greater role in determining valuations, particularly as the breakneck pace of growth begins to slow. Investors will increasingly focus on sustainable profitability rather than just rapid growth. In a January 2024 article, Rob Haworth, Senior Investment Strategy Director at U.S. Bank Asset Management, emphasized that technology companies possess strong earnings growth potential, largely independent of traditional business cycles. He explained:
“What is not clear yet is how companies investing in AI as a way to increase efficiencies or monetize services for end users will benefit from these advancements. We’re in a consolidation phase to figure out what revenue growth will be going forward. If AI helps boost productivity, that will support not only current rising stock valuations but individual prosperity as well.”
Franklin Templeton’s 2025 Technology Outlook echoes this sentiment, predicting another year of strong growth in the sector. The report notes that the “Magnificent Seven”—a group of leading tech giants—delivered exceptional earnings in 2024, outpacing both the broader market and the tech industry itself. While these companies are expected to maintain strong momentum, The firm anticipates that the rest of the sector may start catching up in 2025.
Tech investments are projected to grow exponentially in the coming years, reshaping the profitability landscape. Emerging technologies such as artificial intelligence, quantum computing, and autonomous systems present both immense opportunities and significant challenges. Some companies will achieve sustainable profit margins through strategic pricing and ecosystem advantages, while others will struggle under the weight of fierce competition and heavy reinvestment costs. For investors and stakeholders, understanding these shifting dynamics is key to navigating the ever-changing tech sector.
Our Methodology
To identify the 10 most profitable stocks, we conducted extensive research on U.S.-listed technology and tech-adjacent companies with a market capitalization of at least $2 billion. Rather than relying solely on absolute net income, we refined our selection criteria by focusing on companies with both an operating margin and net profit margin exceeding 20%. This approach ensures that high-margin firms are not overshadowed by larger corporations with higher overall earnings. After applying these filters, we ranked the stocks in ascending order based on their trailing twelve-month net income, with the company reporting the highest net income securing the top position.
Note: All pricing data is as of market close on February 14.
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Oracle Corporation (NYSE:ORCL)
TTM Net Income: $11.6 billion
Number of hedge funds: 91
Oracle Corporation (NYSE:ORCL) offers an extensive suite of cloud applications, platform services, and engineered hardware systems. The company commands a substantial market share in database management systems and provides a variety of enterprise solutions, including Oracle Cloud Infrastructure (OCI), data management, enterprise resource planning (ERP) software, and hardware products such as servers and storage. The cloud and license business includes key infrastructure technologies like Oracle Database, MySQL Database, and Java, which are widely used globally. Oracle Corporation (NYSE:ORCL) supports deployment models that include on-premises, cloud-based, and hybrid solutions. Its operating margin stands at around 32% and net profit margin is around 21%.
Oracle Corporation (NYSE:ORCL) has been aggressively expanding its cloud offerings, establishing itself as a formidable player in the cloud infrastructure market. Recent quarters have shown significant increases in cloud revenue, driven by the rising demand for cloud services and applications. The integration of AI and machine learning into Oracle Corporation (NYSE:ORCL)’s cloud solutions is expected to enhance its offerings, making it an attractive choice for businesses modernizing their IT infrastructure. The company is also expanding its global data center footprint to meet growing customer demands and is expected to benefit greatly from the $500 billion ‘Project Stargate’, positioning itself as a leading player in AI compute.
In January 2025, Oracle Corporation (NYSE:ORCL) announced plans to enhance its global cloud infrastructure by adding eight new cloud regions in North America and Asia over the next 12 months. They will also introduce powerful new capabilities for ‘Oracle Database@Google Cloud’ to increase customer value. Additionally, data center capacity will be doubled in regions like London, Frankfurt, and Ashburn to meet increasing demand.
On January 17, Cantor Fitzgerald initiated coverage on Oracle Corporation (NYSE:ORCL) with an Overweight rating and a $214 price target. The analyst believes that the company will benefit both in the short term and long term from AI, as well as long-term growth in its cloud business (mainly from CDBS), thus he rates the stock as Overweight.
Overall, ORCL ranks 8th on our list of most profitable tech stocks to buy now. While we acknowledge the potential of ORCL to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ORCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.