To The Moon

$Oracle(ORCL)$ presented a mixed bag for investors this week. While the company's stock jumped in after-hours trading on the heels of cloud deals with Google and OpenAI, their earnings report fell short of expectations. Let's dissect the situation and see if there's an opportunity here, keeping in mind the not-so-affectionate nickname Oracle has earned: "vendor lock-in giant," or as I see it, a company with a reputation for locking customers in rather than building relationships.

Oracle's fourth-quarter results were a bit of a letdown. Both earnings per share and revenue fell short of analyst expectations. Revenue from their cloud and on-premises licenses business, a key growth area, also dipped below estimates. This isn't ideal, and it highlights the ongoing challenge Oracle faces in catching up to cloud giants like $Amazon.com(AMZN)$ and $Microsoft(MSFT)$ .

Oracle's cloud infrastructure business, while still growing, is seeing a deceleration in growth rate compared to the previous quarter. This slowdown is concerning, especially considering their smaller market share compared to the dominant players in the cloud space.

Despite the earnings miss, there's a reason for cautious optimism. Oracle's announcement of cloud deals with $Alphabet(GOOG)$ and OpenAI is a positive development. Their database being made available on Google Cloud and OpenAI choosing Oracle for their AI infrastructure expansion are both noteworthy wins.

The decision is tricky. The cloud deals offer promise, but the earnings miss and overall cloud growth trajectory raise concerns. While Oracle might be a good fit for specific niche applications, their historical reputation for "holding customers hostage" through complex licensing agreements makes them a less attractive proposition for some investors.

ORCL looking strong in the yearly chart

For now, I'm choosing to hold off on ORCL. The cloud deals are intriguing, but I want to see more concrete evidence of sustained cloud growth before taking a leap. In the meantime, I'll be keeping a close eye on Oracle's next earnings report and their progress in the cloud space.

Disclaimer: This is not financial advice. Do your own research before making any investment decisions.