Oracle (NYSE:ORCL) usually isn’t the first company that gets mentioned in discussions about artificial intelligence technology, but it’s benefiting from demand for AI-compatible cloud-computing infrastructure. Even though Oracle stock is in rally mode, it’s not too late to take a share position.
In April, I identified Oracle as an overlooked AI powerhouse that investors should pay attention to. Since then, the Oracle share price has moved substantially higher.
Now, it’s time to look at $200 as a realistic price target. As the old saying goes, “Don’t fight the tape,” especially since Oracle stock is on track for a sustained rally.
Oracle’s Founder Makes $15 Billion in Just One Day
Oracle co-founder and Chief Technology Officer Larry Ellison already had plenty of money, but his net worth grew rapidly a couple of weeks ago. That’s because Oracle’s fourth-quarter fiscal 2024 earnings report prompted a sizable share-price rally.
One source stated Ellison netted $15 billion in a single day; another source said it was $14 billion “overnight.” Either way, Ellison is rolling in the dough.
What prompted the run-up in Oracle stock? Apparently, investors were pleased to see Oracle’s Q4-FY2024 Cloud Infrastructure (IaaS) revenue grow 42% year over year to $2 billion.
Furthermore, investors liked Oracle CEO Safra Catz’s statement that the company “signed over 30 AI sales contracts totaling more than $12.5 billion.” Catz added that these AI sales contracts included one with OpenAI “to train ChatGPT in the Oracle Cloud.”
Oracle’s Billion-Dollar AI Investment in Spain
Without a doubt, Oracle is doing everything possible to reinvent itself as an AI-first company. This includes making a large-scale financial investment in a country you might not have expected.
Remember, the AI-tech trend isn’t limited to North America. It’s also alive and well in Europe, and Oracle is evidently targeting Spain as a future AI hub.
Thus, Oracle plans to invest over $1 billion in AI technology in Spain. There, Oracle will “open a third cloud region in Madrid and drive AI skills development across the country.”
Of course, this isn’t just an act of philanthropy as there are long-term revenue-generation opportunities for Oracle in Spain. In particular, Oracle expects to help its customers “migrate mission-critical workloads from their data centers to Oracle Cloud Infrastructure.”
Oracle Stock: $200 Is Coming This Year
The second half 2024 is almost upon us. Do you have enough portfolio exposure to cloud computing and AI? If not, then today is great day to take a share position in Oracle.
Now, I’m not suggesting that you’ll make $15 billion in a day like Ellison did. However, patience will pay off as Oracle ambitiously garners more AI sales contracts. Hence, I fully expect Oracle stock to break above $200 this year before heading toward higher and higher price targets.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.