Back to top

Oracle (ORCL) Ups the Ante With New AI-Based Cloud Solutions

Read MoreHide Full Article

Oracle (ORCL - Free Report) recently enhanced Oracle Risk Management Cloud with new Advanced Access Controls; an artificial intelligence (“AI”) based risk management and security solution. The new offering attempts to enhance the company’s Enterprise Resource Planning (“ERP”) Cloud capabilities.

With the new solution, the enterprises will be able to managecorporate finance processes, comprising segregation of duties (“SOD”), financial compliance (“SOX”), proprietary information, privacy risks including those pertaining to GDPR, and other payment risks.

In the words of Oracle’s vice president of Risk Management Cloud Product Strategy, Sid Sinha, “Advanced Access Controls automate the time-consuming analysis needed to protect business data from insider threats, fraud, misuse and human error.”

Tech companies are ramping up their AI portfolios to meet evolving demands. In fact, per Gartner data, 40% of new enterprise applications deployed by service providers will comprise AI technologies, by 2021.

Moreover a report by MarketsandMarkets estimates that the AI in Fin Tech market is expected to hit $7.3 billion by 2022 at a CAGR of approximately 40.4% from $959.3 million valued in 2016.

We believe the company is well poised to benefit from its growing presence in the financial technology market with its new AI-based initiatives.

New SaaS App for Local Governments

In a separate press release, the company introduced a new Software-as-a-Service (SaaS) based application named Oracle Public Sector Community Development.

As the name suggests, the new solution is aimed at enabling local governments enhance their respective constituents with accelerated and effective land management capabilities.

The comprehensive offering provides reliable solutions toregulatory processes, ensuring public safety, maintaining accountability which consequently stimulates economic growth.

The new application is supported by company’s robust techniques, including AI, chatbots and  integral applications, to aid government agencies in digitizing services.

Oracle Public Sector Community Development is a cost-effective, scalable and subscription based cloud offering. Oracle intends to bring new enhancements to market on the back of itsbroad-based investments in research and development.

Public sector customers can boost engagement of their constituentswith government by leveraging Oracle's digital driven by robust cloud, Internet of Things (IoT), and big data and analytics techniques.

In this digital transformation era, governments are increasingly focusing on devising new sophisticated solutions by imbibing cloud computing techniques. Per Technavio data, considering the government sector, the global cloud computing market is anticipated to witness a CAGR of over 13% amid 2018 and 2022.

The aforementioned factors reinforce our belief in the company’s new solution.

Talking about cloud revenues, Oracle’s total cloud services and license support revenues (accounted for 60% of total revenues) for the fourth quarter of fiscal 2018 increased 7% (5% in constant currency) to $6.77 billion.

We believe that the company’s growing cloud market share will continue to drive top-line growth in the foreseeable future.

Share Price Performance

Oracle stock has returned 5.9% year to date, compared with the industry’s rally of 27.5%.



This underperformance can primarily be attributed to investors’ concern over slow-paced growth in company’s cloud revenues compared with other cloud vendors.

However, the company is expected to gain investors’ confidence with the latest AI-driven and cloud based developments.

To Conclude

We note that compared with many of its traditional peers Oracle is a late entrant in the cloud computing market.

Nevertheless, we believe that Oracle’s growing focus on cloud computing and incorporating AI techniques across its SaaS applications will boost its market share going ahead.

Moreover, improving cloud revenue is anticipated to help the company offset sluggish on-premise new license revenues in the near term.

Zacks Rank & Key Picks

Oracle currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same industry are Salesforce.com Inc (CRM - Free Report) ,Aspen Technology, Inc. (AZPN - Free Report) and Bottomline Technologies, Inc. (EPAY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The projected long-term earnings growth rate for Salesforce, AspenTech and Bottomline are 25%, 16.5% and 12%, respectively.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>



More from Zacks Analyst Blog

You May Like

Published in