Oracle (ORCL) Remains a Long-term Cloud Computing Story Despite Near-Term Headwinds

Oracle Corporation (NYSE:ORCL) is one of the most promising cloud stocks according to analysts. Morgan Stanley, in an update issued on January 23, lowered its target price on Oracle Corporation (NYSE: ORCL) from $320 to $213. The stock is currently trading about 19% below this level. The investment firm is confident that the company will succeed in its massive GPU-as-a-Service (GPUaaS) opportunity. However, the capital-intensive buildup required to successfully provide this service is likely to drive short-term earnings downward.

Oracle’s (ORCL) Strategic Innovation Boosts its Dividend Appeal

On January 20, Guggenheim analyst John Difucci maintained a Buy rating on the stock, along with the price target of $400. The firm views Oracle as a long-term growth story, anticipating hyper-EPS growth and substantial free cash flow over the coming decade.

In another major development, under a transaction that closed on January 22, Oracle, PE firm Silver Lake Management, and Abu Dhabi-based MGX will each own a 15% stake in TikTok’s US entity. This ownership stake positions Oracle to benefit, as it has been a cloud computing partner to TikTok for many years and, according to some reports, has been designated as the Trusted Technology Partner. A Bloomberg report on the development said that “Oracle will serve as a security guard charged with ensuring TikTok complies with the law.” With this development, Oracle is well-positioned to benefit from TikTok’s cloud computing and infrastructure needs.

Oracle Corporation (NYSE:ORCL) provides a range of products and services to support enterprise IT environments across the globe. The company’s Oracle cloud software as a service offering consists of different cloud software applications, such as Oracle Fusion cloud enterprise performance management EPM, Oracle Fusion cloud enterprise resource planning ERP, Oracle Fusion cloud human capital management HCM, and others.

While we acknowledge the risk and potential of ORCL as an investment, our conviction lies in the belief that some 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 and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT:  Cathie Wood’s Stock Portfolio: Top 10 Stocks to Buy and 30 Most Fantastic Stocks Every Investor Should Pay Attention To.

Disclosure: None. This article is originally published at Insider Monkey.