Stifel Boosts Oracle (ORCL) Price Target to $250 on Cloud Growth
Analyst Brad Reback quoted the company's recent dramatic increase in capital expenditure and RPO (Remaining Performance Obligation) gains, which back growth expectations of the management for the company's Cloud Infrastructure and SaaS-Apps businesses. These gains should generate accelerating revenue increases in the coming years, the firm noted.
Even though the higher capital spending will lead to additional near-term gross-margin compression, the analyst added that there is 'no question this management team is extremely adept at managing expenses.'
They believe that sustainable Cloud growth and operating expense discipline should allow Oracle to overcome the revenue mix shift headwinds and support accelerating EPS growth in FY27 and beyond.
'While Oracle continues to benefit from escalating Infrastructure demand, we remain more cautious due to FCF implications given the company's need for significant capital investment to sustain this growth.'
While we acknowledge the potential of ORCL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 10 AI Stocks in the Spotlight and
Disclosure: None.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
15 minutes ago
- Yahoo
Spear AI raises first round of funding to apply AI to submarine data
By Stephen Nellis SAN FRANCISCO (Reuters) -A startup founded by U.S. Navy veterans aiming to help the U.S. military use artificial intelligence to decipher data gathered by submarines has raised its first round of outside capital. Washington-based Spear AI specializes in working with what is known as passive acoustic data, which is gathered by listening devices underwater. Its long-term aim is to use AI to help submarine operators understand whether an object heard could be a rain squall, a whale, or a vessel that could be a threat, and to detect where it is and how fast it is moving. The challenge is that most existing AI tools are trained on data such as words or images that have been painstakingly labeled and organized over years or decades by companies such as Scale AI, which recently signed a $14.8-billion deal with Meta Platforms. Data from acoustic sensors is different. Spear AI co-founders Michael Hunter, a former U.S. Navy SEAL analyst, and John McGunnigle, a former nuclear submarine commander for the U.S. Navy, are building a hardware and software platform that aims to prepare that data for AI algorithms. The company sells sensors that can be attached to buoys or vessels and a software tool to help label and sort the data gathered by the sensors to make it ready to be put into AI systems. The U.S. Navy this month awarded Spear AI a $6-million contract for its data-labeling tool. Spear AI, founded in 2021, has been self-funded and has about 40 employees. Hunter, the CEO, said it raised $2.3 million from AI-focused venture firm Cortical Ventures and private equity firm Scare the Bear. The funding will be used to double the company's headcount to support its government contracts and commercial business prospects, such as monitoring underwater pipelines and cables. Hunter said Spear AI also aims to sell consulting services, a model similar to defense tech firm Palantir. "We wanted to build the product and actually get it out the door before the contract came in to get it," Hunter told Reuters. "The only way you can do that is with private capital." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15 minutes ago
- Yahoo
Minimize Your Apple Stock Risk Before Earnings on July 31 with This 1 Options Strategy
Apple (AAPL) is certainly a familiar name for investors. But it has been acting strangely this year, especially for a stock that was the first to cross the $3 trillion market cap level. As we see here, it is still above that perch. However, questions about the firm's ability to continue to deserve its lofty multiple, currently around 30x trailing earnings, and its ability to compete in the artificial intelligence business have dogged AAPL this year. The stock is off more than 14% year to date, well behind the broader market. More News from Barchart Low IV Alert: Stocks that Could be Ready to Pop Unusual Volume in Las Vegas Sands Call Options - Investors Bullish on Macao Gambling Alpha From Ashes: 'Big Loser' Comstock Resources (CRK) is Flashing a Statistically Significant Reversal Signal Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! That makes next week's earnings report even more of an 'event' than usual. So if you look at investing first as an exercise in risk management, and not as a sport or a casino game, an option collar might be a way to get exposure to AAPL while reducing the risk associated with a post-earnings decline. Show Me the Chart First! That's what I say to myself, as well as the folks I coach on using collars. Sure, you can technically collar any stock or ETF with a liquid options market. However, 'throwing good money after bad' is not a great habit. So as a 40-year chartist, and one who has seen a ton of manic markets, I only want to move forward if the stock chart indicates to me that there's a fighting chance the stock will go higher. That said, we're seeing again this earnings season that any company can be 'taken out back and shot,' to use a phrase from old Western movies. So with AAPL, I look at the daily chart below with my eyes wide open. I see a stock that is trying to mount a comeback. That 20-day moving average in yellow is trending well. But the PPO below is a bit choppy. And while many technicians wax poetic about this or that indicator, I'm a bit more visual, and less jargony. The weekly chart below is more encouraging, and also less. What? Allow me to explain. This is a market characterized by stocks that have been down on their luck suddenly surging in price. That makes traditional technicians happy, because it is positive momentum. However, like a sprinter in a horse race, if the speed can't be maintained long enough, the finish will not be as successful as the start. I see that risk with AAPL's weekly chart here. The 20-week moving average is still in a downtrend, and the PPO just crossed up. That latter aspect of the chart is good, but when that occurs so far below zero, it is less reliable. This all paints a picture for me of a stock that has a chance to move higher, but that an event like the forthcoming earnings report on Thursday, July 31 could easily blow that out of the water. But for those who like AAPL, collaring it can allow you to have your cake and eat it too. Here's one collar combination I zeroed in on. The table below shows four different combos, so you can see a small fraction of the variety of strike prices, expiration dates, break-evens and upside/downside combinations one can explore using Barchart's tools. How to Collar Apple Before Earnings: An Example The combination I'll focus on is the top one above. It goes out 5 months to Dec. 19, the last AAPL expiration date this year. So there's some time. The stock was trading near $214 on Friday morning, and the collar involves buying 100 shares of AAPL, buying a put option with a strike price of $205, and selling a call option struck at $260. This means I can sell AAPL at $205 if it declines below that level between now and Dec. 19. And if it rises to $260, roughly its all-time high reached at the end of last year, I could be forced to sell it. Talk about a high-class problem! That range is not the 'final' range for this collar setup, however. There's the net cost of the options. The puts cost $8.85 a share and the calls bring in $1.83, for the downside protection and for giving up profits, respectively. That nets out to about $7 a share. So if we take that $205 to $260 range and drop both levels by the net cost of $7, viola! We have an 'effective range' for this collar of $253 to $198. Recall that AAPL trades at $214 in this example. That produces upside potential of 18% and downside risk of 7.5%, for about a 2.5-to-1 reward/risk ratio. Option Collars Are Just 1 Way to Manage Risk To me, that ratio is as important a factor in investing as anything, whether you achieve it through an option collar or another strategy. So whether it is collaring popular stocks like AAPL, tactically managing assets, other options strategies, or simply using the strategy of 'position-sizing,' there are more ways than ever to manage risk in these modern markets. Earnings season is a great reminder of that. On the date of publication, Rob Isbitts did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15 minutes ago
- Yahoo
Trump Dismisses Canada Trade Talks
President Trump says Canada trade talks aren't a priority, so those 35% tariffs set to kick in on August 1 will likely stay put. He told reporters Friday we haven't really had a lot of luck with Canada and added I think Canada could be one where they'll just pay tariffs, not really a negotiation. Warning! GuruFocus has detected 4 Warning Signs with NVDA. That follows his Truth Social announcement earlier this month warning of 35% levies on Canadian importsand potential hikes if Ottawa retaliatesup from the prior 25% rate. The Canadian dollar barely budged on the news, echoing his point that a deal isn't in the cards right now. Why it matters: Keeping high tariffs in place without fresh negotiations could strain U.S.?Canada trade ties and hit cross?border industries. Investors will be watching any Canadian response and the impact on sectors like autos and energy once those tariffs take effect. This article first appeared on GuruFocus.
