Is Oracle Corporation (ORCL) the Best Cloud Stock to Buy Now ...
Recently, a list of the 10 Best Cloud Stocks To Buy According to Short Sellers was compiled, shedding light on where Adobe Inc. and Oracle Corporation (NYSE:ORCL) stand in the cloud stocks landscape.
The Cloud Computing Market Overview
The cloud computing market, valued at $480 billion in 2022, is expected to see substantial growth at a CAGR of 17% to reach $2.2 trillion by 2032. This market comprises three primary segments: infrastructure as a service (IaaS), software as a service (SaaS), and platform as a service (PaaS).
Among the key players in the market, companies like AWS, Azure, Google Cloud, Aliyun, and Huawei Cloud dominate the global IaaS market, with AWS leading the pack in revenue generation.
Valuation of Cloud Computing Stocks
Unlike traditional companies, valuing cloud computing stocks, particularly SaaS stocks, involves metrics like EV/Revenue and the Rule of 40, considering the industry's focus on growth and high margins.
For SaaS stocks, the Rule of 40 states that the sum of a firm's revenue growth rate and profit margin should surpass 40%. This metric, along with EV/Revenue, offers insights into a SaaS company's financial standing.
Stock Performance and Market Dynamics
The performance of SaaS stocks is closely tied to economic conditions and monetary policies. Factors like a low-interest regime can benefit SaaS and cloud computing firms, impacting their valuations.
Artificial intelligence also plays a crucial role in shaping the SaaS landscape, with AI technologies influencing business models and growth expectations of SaaS companies.
Oracle Corporation (ORCL): A Cloud Computing Giant
Oracle Corporation (NYSE:ORCL) is a key player in the cloud computing industry, offering enterprise software solutions and establishing a strong presence in AI through infrastructure services. The company's partnerships with tech giants like Microsoft, Amazon, and Google highlight its growth potential.
Larry Ellison, the billionaire founder of Oracle Corporation (NYSE:ORCL), emphasized the company's strong performance in cloud services during the Q4 2024 earnings call, showcasing significant growth in Oracle Cloud Infrastructure (OCI) and high-profile partnerships with industry leaders.
Considering Oracle Corporation's strategic moves and its position in the cloud computing market, it emerges as a compelling choice for investors looking to capitalize on the growing cloud industry.
