Oracle just reported fourth-quarter earnings, as well as two separate AI partnerships moments ago. The stock seems to be rising on those announcements with Google, with Microsoft, and OpenAI. Joining us now, Dan Morgan, senior portfolio manager at Sovis Trust. So, we got a TW for or maybe even a three for, I guess, Dan, with the earnings and then these partnership announcements. What's your big takeaway here? What do you think is the most important thing that investors should be looking at from this news? Well, Julie, it's kind of a mixed report because, as you mentioned in the beginning, they missed on earnings, they missed on revenue, the all-important number which is cloud services revenue, which as you mentioned, they missed slightly, and we also saw the overall growth rate fall to about 20% compared to 25% in the third quarter. But then they beat on their OCI number, their Infrastructure Cloud business, as you mentioned, was a little bit better than expected, around two billion. So, it seems to me, guys, like the street is kind of pushing that aside, and they're really

just excited about these partnerships, and anything that Oracle can do to, you know, move forward their Cloud business, they're going to get excited about. I mean, they generate about 38% of their revenues right now from cloud, and Oracle's got a great opportunity. If they can cross-sell their huge mega-database population, which is about 400,000 installs, into their Cloud business, it'd be huge. So, I think that's what everybody's excited about, these partnerships. Yeah, and Dan, they're just talking to the exec, giving a little commentary, saying throughout fiscal 2025, they talk about continued strong AI demand to push Oracle sales and RPO even higher, result in double-digit revenue growth this fiscal year. You know, Dan, for investors listening right now, you know they're always thinking, looking for smart AI plays. Do you consider Larry Ellison's company to be one of them? Dan, you know we do. I mean, I look at Oracle as a dominant player in database. They have about 42% market share. They've been around forever, Josh. I've been

following for over 30 years, and they've got into all the other hot businesses in the past, and then they got into cloud. And you know they do have a bit of a distinct advantage over, let's say, an alphabet or Google with GCP. They're not quite as large, obviously, as AWS with Amazon, and AER with Microsoft, but they're gaining. They're gaining share. I mean there's still a single-digit market share, but they're high, you know, single digits, and they're moving up. If they can continue to, like I say, take advantage of this great opportunity they have with this huge installation base. And I think that's what the street sees. And we also see Josh consistency. Oracle is very consistent because of their customer base. It's heavily, uh, governmental. They have very reoccurring. About 70% of their revenues are reoccurring, so it's not as risky as, let's say, a high-flying software company that's hoping to close that deal by the end of the quarter so they can beat numbers and tan what what.

is the role that that Oracle is playing. You know when we hear about these new partnerships with OpenAI for its infrastructure what exactly like where does it fit in. That's a good question Julie. Unfortunately, I don't have perfect answer but I would expect because those are the leadership companies I mentioned Microsoft AER and they're really gaining market share right now in AWS. The fact that they're able to put together these partnerships and be able to work together opposed to working against each other is huge so I think that's why the street was reacting so positively uh to this announcement. I think Josh and Julie if we were to not have those announcements that they made with those partnerships with GCP and with AER um I think you might have gotten a little bit of a different reaction on this stock with this earnings report because of that miss that they had in cloud services. Dan I want to switch gears here a bit bit stick with the AI theme Dan um but interested listen Tim Cook took the

stage yesterday, and he kind of laid out his AI Vision, his AI strategy, and investors Dan, they were plenty excited about that today, that stock soared. What did you think, Dan? Were you as excited? Well, it's interesting, Josh, because you know everybody was really negative on Apple compared to the other megatechs in terms of their AI strategy, and we've talked about that before in the show. You everybody was unveiling this great upcoming roadmap, meta, alphabet, and really Apple was kind of being left behind. And so we're waiting for this developer conference for Tim Cook and company to come out and make their announcement, and there wasn't really too many big changes, Josh and Julie. I mean, instead of hitting like a grand slam home run like Nvidia with a Blackwell chip or you know Microsoft buying chat GBT, they're going to do it a little bit at a time with their current product mix, and they outline that roadmap at the meeting. So, um, I think it's a positive. It gets a new frame of thought surrounding.

Apple stock in terms of their AI initiatives, and it's not the old rerun that we've heard. That Apple's missing out, everybody's passing them up, and they definitely have a strategy, and they laid that out. And I think it was a positive. The stock closed today at a record. Dan, as people kind of took a second look at it, would you add to an Apple position right now? You know, Julie, we have a massive position in Apple. We started buying it back in 2005 at a cost basis of like A123 with all the split-adjusted time. Yeah, I mean, we actually added it to the buy list, and from the Bay Area, and I was out in California, and I was seeing things really taking off at that time with their MP3 player. This was before the iPhone, and we put it on the list. So, you know, it is a stock that just about everybody holds. Everybody has these huge concentrations in it because it's done so well. So, you know, for, you know, obviously investors that have the right

risk tolerance right objectives something that we'd look at there's no doubt. Josh and Julie the stock is very extended right now based on a multiple basis. If you're to look at let's say the growth that we're expecting out of it, which is kind of single digit, uh trades are pretty high multiple, uh but you know it's been on our list for a super long time. It's been a tremendously successful stock for us and you know it's just been a big winner so it's hard to turn your back to it. So it's definitely something that is on the list and we would continue to look at to purchase for the right investor with the right objective in risk tolerance. And last question, uh on Apple Dam you have been, you know a longtime shareholder there. Did you think what Tim cooking out yesterday, you know I think one big question investor is trying to figure out whether that kind of jump starts some iPhone meaningful iPhone upgrade cycle any thoughts there Den that's a great question Josh because you know they're going to come out

September with iPhone 16, they have the new iOS 18 operating system, which is laden with AI technology features. They also have the new revamp they're doing on the Siri. They have the Gemini relationship with Alphabet. So, is that enough to kind of gel that super cycle upgrade tick that we haven't really seen right guys in the last couple new releases? So, I think it could. I think we could make a strong case that, you know, with enough built-in AI features, people would want to go and get that new iPhone 16, as opposed to just kind of waiting around like they have in the past with iPhone 14 and iPhone 15. Dan, always great to have you. Thanks for joining us. Thank you.

Oracle releases Q4 earnings, stock jumps on cloud partnerships

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Oracle releases Q4 earnings, stock jumps on cloud partnerships

Oracle releases Q4 earnings, stock jumps on cloud partnerships

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