Jim Cramer Discusses Oracle and C3.ai: Investment Insights

Jim Cramer shared his insights about Oracle Corp. and C3.ai Inc. on Tuesday, suggesting differing strategies for investors regarding these two companies.

Investment Outlook for Oracle: After Oracle announced its fiscal second-quarter earnings, its stock price fell by 6.67%. The company reported adjusted earnings of $1.47 per share and revenues totaling $14.06 billion. Unfortunately, this was below Wall Street's expectations, which forecasted earnings of $1.48 per share along with $14.11 billion in revenue. Cramer believes this decline presents a buying opportunity, stating, "I’d be a buyer of Oracle after this pullback, because the most important parts of the business are still doing great." He pointed out that the earnings miss was likely due to one-off issues and emphasized the strong performance of Oracle's key cloud infrastructure and AI business segments.

Furthermore, Oracle's management highlighted that demand for its services continues to outstrip supply. They also noted strategic partnerships with well-known tech firms such as Oracle, OpenAI, xAI, Cohere, NVIDIA Corp., and Meta Platforms Inc..

Concerns About C3.ai: Cramer expressed caution towards C3.ai, which recently experienced a rise in its stock price after outperforming quarterly expectations. However, after examining its performance more closely, the stock settled at a modest 0.12% gain. Cramer advised investors who own C3.ai shares to "take something off the table," attributing his caution to concerns regarding the company's revenue growth rates and its ongoing financial losses.

This dichotomy between Oracle and C3.ai is reflective of the current market landscape for AI stocks. While Oracle's recent price drop provides a potential buying opportunity backed by solid fundamentals, Cramer's view suggests that C3.ai’s gains might stem more from market enthusiasm surrounding AI than from its underlying business performance.

Analyst Perspectives: Rishi Jaluria from RBC Capital Markets maintained a Sector Perform rating on Oracle, setting a price target of $165. He acknowledged that Oracle's third-quarter guidance appeared weak but noted an optimistic outlook for its cloud revenue, anticipating it to reach $25 billion for the fiscal year.

Oracle, C3ai, Investing