Should You Invest in Oracle?

PHOTO CREDIT: Oracle

OVERVIEW

Why You Should?

  1. The COVID-19 Pandemic has completely shifted consumer trends. This has led to a drastic increase in the demand for Oracle’s cloud-based services as companies had to modernize their operations to best serve their customers during these tough times. This has led to stable sales and profits from the company during these times.
  2. Oracle has also needed to position itself for the future of cloud and technology. It has purchased several companies in order to help it do this. One of these purchases was the North American assets of Tik-Tok, giving Oracle 12.5% ownership of the company. The revenues from this social media giant will aid Oracle in the future. Oracle is here to stay, even though it is an old tech company.
  3. Oracle has divested from older assets that are no longer needed and has focused its efforts on the growing cloud industry. This industry could be worth billions if not trillions of dollars in the future as companies around the world look for the most efficient ways to conduct business. Being a part of this growing industry will benefit Oracle’s future growth and will also benefit its investors.

Why You Should Not?

  1. Oracle faces tough competition across all of its divisions. Its cloud division has tough competition from companies like Amazon, Google, and IBM as well as other companies like Fastly and Snowflake. Tik-Tok has competition from companies like Facebook, Instagram, Snapchat, and many others. This competition might hurt Oracle’s growth and sales in the future.
  2. Impacts from the COVID-19 Pandemic have also negatively impacted Oracle’s sales. Companies that do not have money to modernize have gone bankrupt, wiping out some of Oracle’s future customers. On top of that, weak demand in the restaurant and hospitality industry has also hurt some of Oracle’s sales numbers. All of this has also hurt the company’s investor base.
  3. Oracle is a fairly old technology company, founded in 1977. Other technology companies like IBM have had to divest assets and invest in others. This short to mid-term process hurts the company’s numbers and causes the stock price to underperform. I would pay attention to Oracle’s future acquisitions and see how that will hurt the company’s numbers.

MY OPINION

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.