We recently compiled a list titled Jim Cramer’s Ultimate Stock Picks: 10 Hot Stocks to Consider. In this article, we will look at where Oracle Corporation (NASDAQ:ORCL) ranks among Jim Cramer’s 10 hot stocks to consider.
In a recent episode of Mad Money, Jim Cramer emphasized the unexpected strength in the market, pointing out that many companies are doing better than Wall Street realizes. He suggests that investors should stop second-guessing these companies every time negative news surfaces. Cramer praises the excellent management and execution by CEOs, which he feels often goes unappreciated.
“Suddenly, all is forgiven, or if not all, then at least most. I’m talking about the incredible resilience in this market, buoyed by a recognition that many companies are simply better than Wall Street gives them credit for. We need to stop turning against them every time there’s a seemingly bad data point. Every day I come to work, I’m dazzled by the resourcefulness of executives who do their best to create value for you, the shareholder. Lots of stocks went up on days like today when the Dow advanced 335 points, the S&P gained 75%, and the NASDAQ jumped 1.0%, all thanks to good management and excellent execution that often goes unnoticed.”
Jim Cramer acknowledges that while some CEOs might warrant skepticism, many are truly exceptional and deserve more recognition for their efforts. He criticizes the overemphasis on short-term economic indicators, arguing that great companies stay focused and aren’t thrown off by minor fluctuations.
“Listen, I’m not a pushover. I can hit CEOs with tough questions when needed, some of them deserve skepticism and scorn. But there are also plenty of brilliant, hardworking CEOs with incredible teams, and you ignore their hustle at your own peril. This often gets lost in the shuffle when we’re focused on the parlor game of guessing the Fed’s next move, a quarter point, half a point, quarter, half. You know what I say? Let’s get serious. Terrific companies don’t get caught up in that quarter-half shuffle.”
Cramer highlights Kroger CEO Rodney McMullen as an example of strong leadership. Despite facing challenges like opposition to its acquisition of Albertsons and a tough economic climate, McMullen has successfully managed to keep food costs down. Through strategies such as an effective loyalty program and improvements to regional stores, the company has performed well. After a strong earnings report, the stock rose more than 7%, reflecting a successful turnaround.
“CEO Rodney McMullen has managed to keep food costs down and deliver fantastic numbers, all while maintaining an expensive, unionized labor force in a very uncertain commodity environment. How? The company confounded critics by developing a superior loyalty program, regionalizing their stores, and creating some of the best private-label products out there, second only to Costco. Food is still expensive, but cooking at home is far cheaper than dining out. McMullen tells us that consumers are no longer flush with cash, especially his most budget-conscious clientele. He notes, “Budget-conscious customers are buying more at the beginning of the month to stock up on essentials, and as the month progresses, they become more cautious with their spending.”
Wow, that’s a tough environment! When I heard this, I thought back to the old company, the one that used to miss its numbers whenever the environment got a little tough. Everybody else remembers the old company too, which is why the stock was just sitting there waiting to be picked up, until this quarter’s report, after which it soared more than 7% in response to the fabulous results. Everyone thought the company would drop the ball, as they used to, but McMullen has finally whipped his supermarket into shape.”
In contrast, Cramer points out that the tech industry often suffers from misunderstandings due to its complex nature. He believes that Wall Street analysts frequently fail to appreciate the expertise and potential of tech CEOs who have a deep grasp of their businesses.
“We all need to eat, so it’s not hard to understand the grocery business. But it’s quite different when it comes to tech, where analysts constantly doubt the resolve and expertise of CEOs who simply know more about their businesses than the critics. In tech, the complexity often leads Wall Street to conclusions that have little to do with reality.”
Our Methodology
This article reviews a recent edition of Jim Cramer’s Morning Thoughts, where he covered different stocks. We have selected and analyzed the ten most notable companies mentioned, ranking them according to how much they are owned by hedge funds, from the least owned to the most owned.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Oracle Corporation (NASDAQ:ORCL)
Number of Hedge Fund Investors: 93
Jim Cramer highlights Oracle Corporation (NASDAQ:ORCL)’s impressive progress in a recent Morning Thoughts post. After Oracle Corporation (NASDAQ:ORCL) announced excellent results for the first quarter of fiscal 2025, which caused its stock to rise, Oracle’s executives projected that revenue for fiscal 2026 will reach at least $66 billion. This is higher than the $64.5 billion that analysts had expected. As a result, Oracle Corporation (NASDAQ:ORCL)’s shares are climbing, and many analysts are raising their price targets.
“Oracle’s amazing transformation continues. Just days after reporting strong fiscal 2025 first-quarter results that sent its stock soaring, executives guided for fiscal 2026 revenues of at least $66 billion, above the $64.5 billion consensus estimate. Shares are jumping Friday. Price target bumps are flooding in, too. Larry Ellison’s prediction that Oracle will one day operate at least 1,000 data centers, up from 162 currently, is looking more and more realistic.”
A positive outlook on Oracle Corporation (NASDAQ:ORCL) is supported by its strong growth in cloud services and strategic moves in AI, multi-cloud, and partnerships. In fiscal Q1 2024, Oracle Corporation (NASDAQ:ORCL)’s performance exceeded expectations, with cloud services and license support revenues increasing by 12% compared to the previous year. Total revenues for fiscal year 2024 reached $53 billion.
Oracle Corporation (NASDAQ:ORCL)’s Remaining Performance Obligations (RPO) jumped by 44%, indicating high demand for its AI-driven cloud solutions. Oracle Corporation (NASDAQ:ORCL)’s $12.5 billion in AI contracts, including a major deal with OpenAI, highlights its leading role in this field. Furthermore, Oracle Corporation (NASDAQ:ORCL)’s multi cloud strategy, supported by partnerships with Microsoft and Google Cloud, expands its market presence and strengthens its competitive edge.
Carillon Eagle Growth & Income Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q2 2024 investor letter:
“Oracle Corporation (NYSE:ORCL) stock rose to all-time highs after the company announced better than expected cloud infrastructure revenue. Oracle signed dozens of new customers, including two leaders in generative artificial intelligence. The backlog remains, and strong growth appears poised to accelerate.”
Overall ORCL ranks 3rd on our list of Jim Cramer’s ultimate stock picks. While we acknowledge the potential of ORCL as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ORCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.