Oracle’s stock saw a significant increase of 20.5% in June 2024, according to data from S&P Global Market Intelligence. The boost came after the company posted mixed fourth-quarter results on June 11. While Oracle reported non-GAAP earnings per share of $1.63 on sales of $14.3 billion, slightly below analyst expectations, the announcement also included news of a major partnership with OpenAI.
CEO Safra Katz revealed that the Oracle Cloud Infrastructure (OCI) platform will play a key role in training OpenAI’s ChatGPT systems in the AI space. OpenAI chose OCI due to its speed and cost-effectiveness, drawing attention from investors and leading to a 13.3% increase in Oracle’s stock price the following day.
Following this positive news, several analysts raised their price targets for Oracle shares, emphasizing the OpenAI deal, rising cloud platform sales, and the company’s commitment to investing in AI infrastructure. As a result, Oracle shares surged by 149% in the first half of 2024, showing renewed momentum in the AI market.
While Oracle’s valuation ratios are not the cheapest, trading at 39 times earnings and 7.5 times sales, they are considered affordable compared to other high-priced AI industry peers like Nvidia and Microsoft. For investors seeking growth potential and fair value in the AI sector, Oracle’s enhanced presence in this booming space presents an attractive opportunity.
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Overall, Oracle’s collaboration with OpenAI and its growing presence in the AI market have propelled the company’s stock to new heights in June 2024, reflecting promising opportunities for investors in the evolving tech landscape.
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