Latest news with #FusionCloudERP
Business Insider
2 days ago
- Business
- Business Insider
Oracle Stock (ORCL) Sustains Bullish Posture and Charges into the AI Era
Multinational technology magnate Oracle (ORCL) is storming the AI frontier, riding a massive wave of demand for its cutting-edge cloud infrastructure and AI-powered solutions. From blockbuster deals with OpenAI and NVIDIA (NVDA) to a $130 billion backlog, Oracle's performance across the board screams momentum. This surge is fueling explosive top and bottom-line growth, while its exciting EPS outlook makes the current valuation a steal. With the stock now up almost 40% since this time last year, I remain firmly bullish on ORCL. Confident Investing Starts Here: Cloud Infrastructure Powers the AI Revolution Oracle's primary growth engine today is its Cloud Infrastructure (OCI), which is capitalizing on the AI boom sweeping the tech industry. In its most recent fiscal Q3, OCI revenue surged 51% year-over-year to $2.7 billion, outpacing major hyperscale competitors such as AWS and Azure. CEO Safra Catz pointed to 'record-level AI demand' as the key catalyst, with Oracle securing major cloud contracts with OpenAI, xAI, Meta (META), Nvidia, and AMD (AMD). These agreements contribute to a $130 billion backlog, up 62% from the previous year, underscoring Oracle's growing role in powering large-scale AI model development and deployment. Oracle's edge lies in its focus on high-performance computing and scalable infrastructure. A prime example is its deal with NVIDIA: Oracle is investing $40 billion to acquire 400,000 GB200 superchips, which will be used to build a massive AI-focused data center in Texas, expected to be operational by mid-2026. It's an ambitious move, but one that is positioning Oracle as a key player in the AI infrastructure space. Demand is strong, and with its advanced data center capabilities, Oracle appears to be just getting started. Oracle Expands Product Ecosystem with Strategy Oracle's strategy of forming strategic alliances is laying the foundation for long-term growth. A standout example is its multi-cloud partnership with AWS, which enables customers to access Oracle databases across platforms with ease. The results are already materializing—multi-cloud revenue grew tenfold year-over-year in Q3. This approach allows Oracle to collaborate with competitors while expanding its footprint in the AI space, reinforcing its leadership in hybrid and sovereign cloud environments tailored to enterprise needs. Another major initiative is Stargate, Oracle's ambitious AI infrastructure project with OpenAI and SoftBank. Oracle isn't just supplying compute power—it's helping to build a full ecosystem that supports advanced AI innovation. CEO Safra Catz also noted that bookings are converting to revenue more quickly than expected, with a 57% increase in OCI consumption revenue. These aren't just headline-grabbing deals—they're translating into real, accelerating growth. Cloud Applications Become the Unsung AI Heroes While OCI grabs the spotlight, Oracle's cloud applications, like Fusion Cloud ERP and NetSuite, are quietly powering its AI story. In Q3, cloud application revenue rose 9% to $3.6 billion, with strategic back-office SaaS applications growing 18% to $8.6 billion annually. If you are unfamiliar, these platforms utilize AI to streamline enterprise operations, from financial planning to supply chain management. For example, Fusion Cloud ERP's AI-driven analytics are deployed by companies like Walmart (WMT) to optimize workflows, aiming to boost efficiency and margins. As the chart shows, ORCL's revenues are inching higher while profit margins are sluggish, for the time being at least. What's notable about this is how these applications integrate with Oracle's broader AI ecosystem. As customers using NetSuite can tap into OCI's AI capabilities, a seamless flow of data and insights is created. This synergy drives stickiness. Once a company adopts Oracle's cloud apps, it's hooked on the ecosystem. The 16% growth in ERP revenues indicates that enterprises are betting on Oracle to modernize their operations with AI at its core. The Road to Valuation Upside Through EPS Acceleration Oracle's focus on high-margin areas like OCI and cloud applications is a recipe for margin expansion. The company's adjusted operating margin hit 44% in Q3, and with cloud revenue growing faster than lower-margin segments like software licenses (down 8%), profitability is set to climb. In the interim, consensus estimates project 8% EPS growth for fiscal 2026, accelerating to 12%, 22%, and 31% over the next three years as AI revenues scale. This trajectory shows that the market expects Oracle to convert its $130 billion backlog into high-margin cash flows. Hence, at 28x this year's expected EPS, Oracle's valuation might raise eyebrows, but I think the numbers tell a different story. The projected EPS growth, fueled by AI-driven cloud demand, suggests the stock is reasonably priced with room to run. As Oracle doubles its data center power capacity this year and triples it by fiscal 2026, revenue and earnings are set to accelerate, making today's price a bargain for long-term investors. Is ORCL Stock a Buy, Sell, or Hold? Wall Street appears relatively bullish on Oracle's prospects. ORCL stock has a Moderate Buy consensus rating, with 16 analysts currently bullish and 14 neutral. ORCL's average stock price target of $178.42 indicates a somewhat constrained upside potential of less than 1% over the coming twelve months. Oracle's AI-Powered Future Beckons Oracle's recent performance deserves serious attention from investors. This is no longer just a legacy database company—between the rapid expansion of Oracle Cloud Infrastructure (OCI), strategic partnerships, and AI-enhanced cloud applications, Oracle is positioning itself as a major contender in the AI space. With a $130 billion backlog and accelerating EPS growth projected in the coming years, the fundamentals are strong. At current levels, the stock offers a compelling blend of growth potential and attractive valuation. Bottom line: Oracle's AI journey is still in its early stages, and there could be meaningful upside ahead.
Techday NZ
27-04-2025
- Business
- Techday NZ
Exclusive: How Oracle's AI agents are driving a new era of enterprise automation
Oracle's AI-powered agents are reshaping business automation, with finance teams seeing both dramatic efficiency gains and cost savings. When Rondy Ng joined Oracle as a developer back in 1990, the idea of artificial intelligence running enterprise processes was the stuff of science fiction. Today, as EVP of Applications Development at Oracle, Ng witnesses Oracle's AI evolution firsthand - overseeing a sweeping transformation in the way global businesses operate. "We have more than 14,000 customers on our Fusion platform," Ng explained to TechDay during a recent interview. "More than 50 percent of Fortune 500 companies run on Fusion Cloud ERP." Ng's role now spans far beyond product development. "My job is not just about building technology, but about helping the world's largest companies - CIOs, CFOs, and CEOs - transform their businesses. And that's exciting, especially now with the rise of AI." AI agents, he explained, mark the next major shift in enterprise automation - especially in finance departments that have historically relied on complex, manual processes. Oracle has already embedded over 50 AI agents throughout its Fusion Cloud Applications Suite. "These agents automate end-to-end workflows, personalise insights, and act on behalf of specific roles - all within the context of the business," he said. Ng gave a striking example of how the technology works in finance. "In accounts payable, you might receive thousands of invoices in different formats - PDFs, images, even handwritten notes. Our Document IO Agent reads and interprets all of these, then enriches the data and creates invoices, journal entries or payment instructions ready for review." Crucially, he added, these AI agents go well beyond traditional rule-based automation. "They're powered by large language models, so they can carry out multi-step processes, understand user roles, respond to natural-language prompts and adapt to new scenarios." Ng believes the arrival of AI agents will redefine how people interact with enterprise software. "In the past, finance users had to learn complex systems just to do basic data entry. Now, they can use natural language - just like texting on a phone - to tell the system what to do. It's a complete change in user experience." He gave another example: "Let's say you want to change a cost centre across a group of invoices. You no longer need to go into multiple screens. You just say it - 'Change the cost centre on these invoices to this one' - and the AI agent does it for you." This kind of innovation, he said, is only possible on a true SaaS platform that's constantly updated. "We push updates quarterly. Everyone is on the latest version, and customers can choose when to turn new features on. It's like your phone's iOS updates - seamless, with innovations ready when you are." The flexibility of Oracle's platform has attracted major clients like Hearst, one of the world's largest media companies. Hearst uses Oracle's AI capabilities to automate invoice processing, drive intelligent payments and unlock dynamic discounting with suppliers. "With Intelligent Payments, Hearst could offer early payment proposals automatically, saving hundreds of thousands in costs," Ng said. "And their invoice matching accuracy jumped from 70 percent to 95 percent over time - dramatically reducing manual effort." Ng was quick to point out that businesses still clinging to legacy systems are likely to be left behind. "Many of our customers are still in the early stages of moving off legacy platforms," he said. "But to get the full benefits of AI, you have to simplify and standardise your processes first." He warned against delaying the shift. "If your data is fragmented across ten different systems, AI can't help you much. You need a unified SaaS platform as a prerequisite. Don't wait until your competitors have already moved and are reaping the benefits." He believes many businesses misunderstand the urgency. "I know some CFOs are thinking, 'My current system is good enough.' But AI is moving fast. The longer you wait, the harder it will be to catch up." Oracle's AI agents are already proving their worth, but Ng sees this as only the beginning. "The long-term vision is for AI agents to fundamentally change the way work gets done," he said. "We're heading towards a future where agents communicate with each other - across departments, across functions - to automate even more complex processes." His early instincts about the value of AI have only deepened with time. "We've been building automation into our systems for years," he said. "But AI makes it simpler, smarter and far more powerful." Despite the hype around AI, Ng stressed that this isn't a passing trend - it's a tectonic shift. "We're still at the beginning," he said. "But this is the direction the enterprise world is going. And there's no turning back." Ng ended with a message for decision-makers weighing the move to AI: "My recommendation? Don't wait. It's now."
