Weekly Update: Is ORCL a Good Buy Here?
Good evening, and welcome to this week’s edition of Stealth Trades!
When there’s blood in the streets, buy real estate.
As I’ve pointed out over the last few months, the AI trade is long in the tooth. Former leaders like Nvidia and Microsoft are now underperforming the market.
Their valuations have become stretched, and these are unlikely to be winners until a real price correction takes place.
But one AI stock is beginning to look very attractive…
Oracle (ORCL) has seen its stock cut in half over the last six months.
At the same time, the company is quietly building what could become one of the most powerful positions in the AI economy.
Here’s the situation…
There is a real battle going on among the artificial intelligence giants.
Everyone thinks the future of AI is about models.
ChatGPT.
Gemini.
Grok.
Llama.
Billions of dollars are being poured into GPUs, training clusters, and massive data centers.
But billionaire Larry Ellison – the founder and CEO of Oracle – revealed a shocking truth in a recent interview.
All these AI models are training on the exact same data – the public internet.
Wikipedia, Reddit, news articles, websites…
Which means eventually, they all start to look the same. In Ellison’s words, they become commodities.
So, if the models eventually become commodities, what becomes the real moat? What makes one more valuable than the others?
Private data.
I’m talking about the financial records inside banks, the medical histories inside hospitals, the operational data inside Fortune 500 companies.
The data that never touches the public internet.
And that’s when this entire story starts to get interesting.
Because Oracle is the one company that already holds a massive portion of the world’s most valuable private enterprise data.
And if AI starts moving toward private data, Oracle will quickly become one of the most important players in the AI ecosystem.
Last year, Oracle signed a $300 billion infrastructure deal with OpenAI. So, with that kind of tailwind, why has the stock gotten hammered?
Well… investors got nervous.
They started questioning software companies in an AI world.
They worried about spending, and balance sheets, and that Oracle might be overbuilding infrastructure.
So, they sold.
But Oracle is now one of only a handful of hyperscale cloud infrastructure providers supporting AI workloads.
And because Oracle came late to cloud, their infrastructure specifically designed for AI training and inference.
This gives them an edge.
Oracle recently launched something called AI Database 26ai, and the idea behind it is simple…
Instead of training AI on private data, you let AI query that data in real time.
This technique is called retrieval augmented generation.
The AI doesn’t absorb the data. It simply reasons over it.
Which means a hospital could analyze patient histories without exposing records.
A bank could evaluate loan portfolios without leaking customer information.
A defense contractor could run AI analysis on classified systems.
All while the data never leaves the vault.
And if that model becomes the dominant way enterprise AI works, the companies controlling enterprise databases suddenly become very powerful.
And Oracle owns a massive portion of those databases.
Oppenheimer recently upgraded the company and suggested the stock could gain 25% from current levels.
Analysts, as a whole, remain bullish on the stock. 31 of them have Oracle as a STRONG BUY.
Even after cutting management projections, they still believe Oracle’s earnings per share could double by 2030.
And right now, the stock trades at roughly 22 times forward earnings.
That’s cheaper than Microsoft, Amazon or Alphabet.
Yet its expected earnings growth is actually faster than some of them.
Now, just to be clear, this is not a swing trade.
This isn’t one of my typical short-term tactical setups.
This is a longer-term positioning idea.
You’re betting on the rise of enterprise AI; on private data becoming the real AI moat.
And you’re betting Oracle executes over the next several years.
The next AI battleground won’t be the models. It will be the data.
And if that happens…
Oracle might be sitting right in the middle of it.
Best wishes for your trading,
Ross Givens