Oracle, the global technology company, has raised its growth outlook and identified new AI workloads as the driving force behind its cloud revenue. In an investor note, Raimo Lenschow stated that the positive impact of better software-as-a-service and Oracle Cloud Infrastructure outweighs the slower-growing parts of the business.
Lenschow upgraded Oracle’s rating to overweight from equal-weight and increased the price target to $150 from $126. He emphasized that Oracle’s products, such as Fusion, NetSuite, and OCI, shifting to the cloud has contributed to the company’s growth in recent years and highlighted that this growth is expected to continue. These three businesses, however, still make up less than 25% of Oracle’s total revenue, indicating further potential for expansion.
Furthermore, Lenschow highlighted the significance of Oracle Cloud Infrastructure (OCI) in accommodating AI workloads. Given its close relationship with Nvidia and being one of the first cloud service providers utilizing Nvidia’s software-as-a-service products, OCI is expected to benefit from emerging AI workloads. Lenschow believes that this, along with other factors, will sustain investor interest in Oracle.
In conclusion, Oracle is poised for solid growth and increased margins driven by the positive mix effect of better software-as-a-service and Oracle Cloud Infrastructure. The expansion of its products into the cloud, including Fusion, NetSuite, and OCI, has been instrumental in driving its growth thus far, and there is potential for further expansion. With OCI well-positioned to capitalize on AI workloads, Oracle continues to generate interest among investors.
Frequently Asked Questions (FAQs) Related to the Above News
What is Oracle's growth outlook according to Raimo Lenschow?
Raimo Lenschow has raised Oracle's growth outlook and stated that the positive impact of better software-as-a-service and Oracle Cloud Infrastructure outweighs the slower-growing parts of the business.
How has Lenschow upgraded Oracle's rating?
Lenschow has upgraded Oracle's rating to overweight from equal-weight and increased the price target to $150 from $126.
What products have contributed to Oracle's recent growth?
Products such as Fusion, NetSuite, and Oracle Cloud Infrastructure (OCI), shifting to the cloud, have contributed to Oracle's recent growth.
What percentage of Oracle's total revenue comes from Fusion, NetSuite, and OCI?
Fusion, NetSuite, and OCI together make up less than 25% of Oracle's total revenue, indicating further potential for expansion.
Why is Oracle Cloud Infrastructure (OCI) significant?
OCI is significant because it is well-positioned to accommodate and benefit from emerging AI workloads, thanks to its close relationship with Nvidia and its utilization of Nvidia's software-as-a-service products.
What does Lenschow believe will sustain investor interest in Oracle?
Lenschow believes that Oracle's strong growth potential, including the positive mix effect of better software-as-a-service and Oracle Cloud Infrastructure, along with its positioning to capitalize on AI workloads, will sustain investor interest.
What factors are driving Oracle's growth?
Oracle's growth is being driven by the expansion of its products into the cloud, including Fusion, NetSuite, and OCI, as well as the positive impact of better software-as-a-service offerings.
How does Oracle's growth outlook affect its margins?
Oracle's growth outlook is expected to lead to increased margins due to the positive mix effect of better software-as-a-service and Oracle Cloud Infrastructure.
What potential expansion does Oracle have?
While Fusion, NetSuite, and OCI have contributed to Oracle's growth, they still make up less than 25% of its total revenue, indicating potential for further expansion in the future.
Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.
