We recently published These 10 Stocks are Buzzing After Important Analyst Calls. Oracle Corp (NYSE:ORCL) is one of the stocks analysts were recently talking about.
Aswath Damodaran, NYU Stern School of Business professor of finance, said in a recent program on CNBC that in every big “boom” over the past few decades, “architecture companies” initially thrive. However, the “biggest” winners in major booms are product and service companies. The professor predicted that in the coming months and years, companies from the product and services space will “elbow” their way to the front. He mentioned Oracle Corp (NYSE:ORCL) among the few possible winners in this race:
“My guess is in the coming months and years you’re going to see more companies from the product and service space not the architecture space elbow their way to the front because if you look at every big boom going back four decades initially the architecture companies are the beneficiaries Cisco during the dotcom boom eventually though the biggest winner is not one of the architecture companies it’s one of the product and service companies and Oracle Corp (NYSE:ORCL) Palantir Microsoft Meta they all want to be there and I think it’d be interesting interesting to see which of those companies ends up being the winner if any of them it could be a company that’s not listed there yet.”
Oracle Corp (NYSE:ORCL) shares skyrocketed after the company’s latest quarterly results. The company said it expects booked revenue to exceed $0.5 trillion. Oracle’s moat is its strong roots in enterprise databases and ERP software that are in high demand with large clients like banks and hospitals. Oracle Corp (NYSE:ORCL) differentiates itself by offering cheaper cloud services while integrating SaaS, ERP, and HCM, creating high switching costs and a durable moat.
Loomis Sayles Growth Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its second quarter 2025 investor letter:
“Oracle Corporation (NYSE:ORCL) is a leader in the enterprise software market with a strong market position in database, infrastructure and application software, and cloud-based software and services. We believe the company’s competitive advantages include its large and experienced direct sales force, a founder-driven management team that reinvests relentlessly to maintain a leading intellectual property (IP) portfolio and differentiated product suite, and a large installed base of clients with high switching costs where it consistently achieves renewal and retention rates in the mid-90% range. We believe Oracle is well positioned to benefit from the continuing growth in data storage and enterprise application software, as well as the shift to cloud-based solutions.
A long-term fund holding, Oracle reported strong quarterly financial results that were above management guidance and consensus expectations on most measures, including remaining performance obligation (RPO) bookings, a forward-looking measure of revenue. As a result, the company expects revenue growth to accelerate and raised its guidance to at least 16% revenue growth in its 2026 fiscal year, driven by cloud growth in excess of 40%. Oracle is the world leader in its largest business segment, enterprise database software used in customer on-premise IT environments. However, the company continues to focus on transitioning its business from a traditional on-premise, up-front software licensing and maintenance revenue model to a cloud computing subscription-based model where software revenue is recognized over the life of the client’s contract. While there has been pressure on year-over-year overall revenue comparisons during this transition, which started over a decade ago as Oracle released cloud versions of its applications and infrastructure software, as up-front license revenue shifts to subscription revenue, we have long expected this to lead to faster growth over time due to a higher customer lifetime value as the transition progresses. We believe the cloud model also allows Oracle to monetize its services and technology more efficiently and yield savings to the customer… (Click here to read the full text)
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Disclosure: None. This article is originally published at Insider Monkey.
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