Why Oracle can rally another 70%, according to investor Victoria Greene

Victoria Greene of G Squared Private Wealth sees significant upside for Oracle and IBM, while remaining neutral on Datadog. Oracle shares rallied 13% after exceeding earnings expectations, with Greene projecting a 50% increase in the next 12 months driven by AI investments like Stargate, while IBM, up 28% year-to-date, is praised for its strategic acquisitions and AI implementation. Despite an upgrade, Greene is hesitant on Datadog due to margin headwinds and cross-selling challenges, preferring to see it trade above its 200-day moving average.

Analysis

Victoria Greene of G Squared Private Wealth presents a bullish outlook for Oracle (ORCL) and IBM, contrasting with a cautious stance on Datadog (DDOG). Oracle shares experienced a significant 13% rally following a fourth-quarter earnings and revenue beat, contributing to a 20% year-to-date gain and a new 52-week high. Greene projects Oracle's stock could reach $300 within 12 months, implying a 50% upside, driven by anticipated robust growth in cloud infrastructure. CEO Safra Catz guided for over 70% growth in cloud infrastructure revenue by fiscal year 2026, a figure Greene believes could be surpassed due to AI investments, particularly related to 'Stargate'. IBM, also hitting a 52-week high and up approximately 28% year-to-date, is favored for its strategic transformation through acquisitions, including the $6.4 billion purchase of HashiCorp and the 2023 acquisition of Apptio. IBM's development of its Quantum Starling quantum computer and internal AI adoption, reportedly saving $3 billion and generating 20-30% of its code, underpins Greene's positive multi-year outlook. Conversely, despite a Wolfe Research upgrade and a nearly 3% daily gain, Greene remains on the sidelines for Datadog, which is down 14% year-to-date. Key concerns include margin pressures, cost control challenges, competition, and stalled cross-selling efforts, with Greene preferring to see the stock trade above its 200-day moving average of around $123 before reconsidering.

Key Decisions for Investors

• Investors may consider initiating or adding to Oracle positions, capitalizing on strong earnings momentum and significant AI-driven cloud growth prospects, despite the recent rally to a 52-week high.
• For IBM, a buy-and-hold strategy could be appropriate, given its successful strategic M&A, internal AI efficiencies, and potential for sustained multi-year growth.
• Exercise caution with Datadog; monitor for a sustained break above its 200-day moving average and tangible improvements in margin trends and cross-selling success before considering new or increased exposure.