#6. Oracle Corporation (NYSE:ORCL)
Analyst Upside: 88.14%
30-Day Decline: 12.73%
Short Interest: 2.60% of Float
Number of Hedge Fund Holders: 119
Oracle delivered 850 megawatts of additional data-center capacity in its fiscal first quarter, helping cloud infrastructure revenue climb 121% to $7.4 billion. Bulls expect completed facilities to turn more AI contracts into recurring sales. Remaining performance obligations reached $664 billion, giving the company substantial business to deliver over future periods.
The shares nevertheless fell 12.7% as October’s financing concerns hit AI infrastructure providers. Oracle generated $23 billion of quarterly operating cash flow but still reported negative $5 billion of free cash flow after capital spending. It also sold $20 billion of common stock during the quarter. Existing shareholders therefore need the new capacity’s profits to outweigh both its financing costs and the dilution from funding it. Customer advances improve near-term cash balances while creating future service obligations, so the $23 billion inflow is not a clean measure of repeatable earnings. Our Oracle cash-flow analysis separates upfront customer financing from cash available after construction spending.
Q2 hedge fund ownership edged up to 119 holders from 115 in Insider Monkey database. Fisher Asset Management increased its share count by 38.7% to 13.26 million, worth $1.94 billion at June-end. September 30 short interest was 2.60% of float. Analysts still see substantial upside, but Goldman Sachs cut its target from $240 to $206 on October 23.
#5. Credo Technology Group Holding Ltd (NASDAQ:CRDO)
Analyst Upside: 89.48%
30-Day Decline: 24.03%
Short Interest: 6.60% of Float
Number of Hedge Fund Holders: 86
Credo makes the connections that move data between expensive AI processors. Its active electrical cables and optical connectivity products address a practical problem — adding computing power isn’t quite as useful when network links cannot keep up. Fiscal first-quarter revenue grew 114.7% to $479 million, and management forecast $525 million to $535 million for the following quarter. Bulls expect faster, more power-efficient links to gain importance as clusters expand.
The shares lost 24.0% over the month as AI hardware valuations came under pressure. Credo had already sold off after its September 1 results, before this screening window. GAAP operating income fell 22.6% sequentially to $120.7 million as GAAP gross margin slipped from 68.2% to 64.5% and operating expenses increased. Midpoint guidance implied a recovery to roughly $137 million of GAAP operating income, up 13.6%, with adjusted gross margin holding around 68%. Bulls therefore need the forecast recovery to materialize after the reported earnings deterioration.
Q2 hedge fund holders rose to 86 from 59, although Point72 reduced its share count by 17.7% to 6.15 million. It still held $1.67 billion at June-end, so the reduction was substantial. Shares sold short then jumped 31.0% between September settlement dates, reaching 6.60% of float. Neither the major-holder trim nor the growing short position fits an uncomplicated bullish reading of the higher fund count.
Credo sells connectivity into networks whose designs are still evolving. Delos’s bid to connect different vendors’ AI accelerators explains why customers may look beyond Nvidia’s integrated systems; whether those designs use Credo products remains a separate question.
#4. Western Digital Corporation (NASDAQ:WDC)
Analyst Upside: 94.52%
30-Day Decline: 27.45%
Short Interest: 4.90% of Float
Number of Hedge Fund Holders: 98
Western Digital’s October 22 results make its 27.4% monthly decline especially striking. Revenue rose 55% to $4.38 billion, and management guided to $5.1 billion next quarter with a 60.5% adjusted gross margin at the midpoint. Bulls are betting that AI-generated data keeps expanding demand for bulk storage, allowing higher shipments and improved pricing to reinforce each other.
The concern, however, is how long those conditions can last. Reports of Toshiba’s planned hard-drive expansion hit the sector in early October. New competing supply could give cloud customers more bargaining power just as suppliers enjoy incredibly strong margins. Financing pressures on the AI buildout add another risk to customer orders. That makes the price paid for current profits important: our Western Digital–Micron comparison tests how weaker cash generation changes the valuation of each stock.
The latest quarter generated $1.38 billion of free cash flow, giving Western Digital cash to fund investment and shareholder returns. Hedge fund holders increased to 98 from 83 in Q2 in Insider Monkey database, although AQR reduced its stake by 518,617 shares, or 15.0%, to 2.94 million. Its remaining position was worth $1.88 billion at June-end, that’s pretty significant despite the reduction. September 30 short interest was 4.90% of float. However, both snapshots are from before the Toshiba reports. Analyst caution is more recent, with TD Cowen cutting its target from $540 to $430 on October 23, despite the strong results. Its revised target sits far below the $668.50 consensus.
