Unlocking AI and Earnings Power: How Zacks' Models Highlight Palantir and Oracle's Growth Potential

In an era defined by Federal Reserve policy uncertainty and escalating geopolitical tensions, investors are increasingly turning to quantitative models to navigate market volatility. Zacks Investment Research's proprietary strategies—such as the Focus List and Earnings Certain Admiral Portfolio (ECAP)—have historically provided a roadmap for outperformance by identifying companies positioned to capitalize on sector-specific catalysts. Today, two standout stocks—Palantir Technologies (PLTR) and Oracle (ORCL)—are delivering eye-catching returns through these models, driven by AI-driven growth and earnings resilience. Here's why investors should pay attention.

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### Palantir's AI Surge: A Focus List Spotlight

Palantir's 101.6% surge over the past 12 weeks (as of late 2024) places it among the star performers of Zacks' Focus List, a portfolio that has delivered a +11.69% annualized return since 2004. The company's AI platforms—Foundry (enterprise data analytics), Gotham (national security), and AIP (AI infrastructure)—are increasingly sought after by governments and corporations grappling with data complexity. With $5.2 billion in cash and its recent inclusion in the S&P 500, Palantir is well-positioned to scale its AI solutions amid rising global defense spending and enterprise digitization.



While challenges such as competition and a lack of dividends persist, the Focus List's track record—outperforming the S&P 500 by 1.4 percentage points annually—suggests this is a risk worth taking. The model's focus on companies with high earnings momentum and strong balance sheets aligns perfectly with Palant.

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### Oracle's ECAP Outperformance: Stability in a Volatile World
Oracle's 39.3% gain in Zacks' ECAP portfolio over the same 12-week period underscores its appeal as a defensive growth stock. ECAP, designed to hold 30 ultra-defensive stocks with consistent earnings, has returned +11.69% annually since inception—a conservative yet steady performance. Oracle's inclusion reflects its fortress balance sheet and long-term AI investments, which are expected to fuel enterprise software demand.



Critically, Oracle's $2.3 billion in quarterly free cash flow and dividend yield of 1.2% provide a cushion during market downturns. Even in 2022, when the S&P 500 fell -18%, ECAP stocks like Oracle held up far better, declining just -2.3%. This stability is invaluable in an era of Fed rate uncertainty and geopolitical risks.

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### The Quantitative Edge: Zacks' Historical Outperformance
The case for using Zacks' models isn't just about individual stocks—it's about systematic outperformance. Take the Zacks #1 Rank Portfolio, which has delivered a +24.1% annualized return since 1988, outpacing the S&P 500 by ~13 percentage points. Similarly, the Top 10 Stocks portfolio, up +43.45% year-to-date in 2024, has returned +25.5% annually since 2012 versus the S&P's +14.2%.



These numbers aren't flukes. Zacks' models prioritize earnings momentum, valuation discipline, and risk management—key factors in volatile markets. By combining Palantir's AI-driven growth with Oracle's earnings stability, investors can mirror the models' success.

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### Investment Strategy: Allocate with Precision
Given the current landscape, here's how to capitalize:
1. Growth via Palantir (PLTR): Use the Focus List's momentum-driven approach to capture AI tailwinds. Consider a 5-7% allocation in a diversified portfolio, hedged against sector overcrowding.
2. Defensive Ballast via Oracle (ORCL): ECAP's focus on earnings certainty makes Oracle a 2-4% core holding, mitigating downside risks while benefiting from long-term cloud/AI adoption.
3. Leverage Zacks' Tools: Monitor Zacks' Rank #1 stocks and ECAP updates via premium tools to adjust allocations as market conditions shift.

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### Conclusion: Models as Your Compass
In a world where geopolitical tensions and Fed policy create daily volatility, quantitative models like Zacks' Focus List and ECAP offer a disciplined path to growth and stability. Palantir and Oracle exemplify this: one riding the AI wave, the other anchoring portfolios through resilience. By trusting these models—and their decades-long outperformance—investors can navigate uncertainty with confidence.

Stay quantitatively focused. Stay resilient.