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Oracle's Stock Dips 3.85% Amidst Stellar Year with 70% Surge Fueled by Cloud and AI Strategies

Mover TrackerThursday, Oct 31, 2024 6:33 pm ET

1min read

On October 31, Oracle Corporation (ORCL) experienced a 3.85% decline. Despite being overshadowed by other tech firms in terms of market presence, Oracle has been outperforming its peers like Microsoft and Google, with its stock price increasing nearly 70% this year alone. This makes Oracle one of the best-performing large-cap tech stocks, second only to Nvidia.

Oracle's rise can be attributed to its significant transformation focusing on cloud technology and its recent ventures into AI. The company's cloud revenue was strong, generating $5.6 billion in the first quarter of the fiscal year 2025, marking a 21% year-over-year growth. Oracle CEO has projected the company’s income growth to reach double digits, driven by AI workload demand. Cloud infrastructure revenue notably rose by 45% to $2.2 billion.

Despite missing the initial cloud wave, Oracle is strategically positioning itself for future success, building new data centers optimized for AI model training. Oracle's unique position as a comprehensive provider of cloud services makes it a critical player in the tech industry. Its neutrality in AI development allows for cooperation rather than competition, fostering partnerships with other tech giants.

In September, Oracle announced a new partnership with Amazon as part of its multi-cloud strategy. It has also collaborated with OpenAI, Microsoft, and Google, further expanding its cloud ecosystem and drawing more clients into its fold.

Oracle's history in China, particularly its longstanding role in sectors like finance and telecom, provides an interesting backdrop to the challenges and potential of database market localization efforts. Initiatives to replace foreign database systems with domestic offerings are still ongoing. Despite challenges, companies like Alibaba have demonstrated successful transitions, encouraging others to follow.

China's push for the localization of databases, termed "de-IOE," continues with varying degrees of success across different sectors. While the public sector is nearing complete domestic adoption, industries such as finance and energy are progressing slower. The technological gap remains an obstacle, yet companies continue to innovate in response to national directives for IT independence by 2027.

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