AI stocks soared last week after OpenAI announced a partnership with Oracle (ORCL) and SoftBank that could result in up to half a trillion dollars of investment in AI infrastructure over the next four years. The investment announced Tuesday adds to the enormous sums that tech giants have already said they’ll spend on data centers and other AI infrastructure in the coming years. Microsoft (MSFT) President Brad Smith said earlier this month that the company was “on track to invest approximately $80 billion t ...

Deal Structure and Participants - The US administration is working on a plan involving Oracle and a group of outside investors to take control of TikTok's operations [1] - ByteDance would retain a stake in TikTok, but Oracle would oversee data collection and software updates [2] - The deal anticipates participation from ByteDance's current US investors, including Susquehanna International Group, General Atlantic, KKR, and Sequoia Capital [3] - Oracle would be responsible for addressing national security issues under the deal [5] TikTok's Operations and User Base - TikTok's management would remain in place to operate the app [6] - The app has 170 million American users and was temporarily taken offline before a law requiring its sale or ban took effect [6] Negotiation Status and Political Context - The terms of the deal are fluid and could include US operations as well as other regions [2] - Oracle was interested in a TikTok stake "in the tens of billions," but the rest of the deal is in flux [9] - The White House sees appeasing Congress as a key hurdle in the negotiations [9] Historical Context and Previous Agreements - TikTok initially struck a deal with Oracle in 2022 to store US users' information to alleviate Washington's concerns about Chinese government interference [5] - The company has argued that its content recommendation engine and user data are stored in the US on Oracle's cloud servers, and content moderation decisions affecting American users are made in the US [10]

Deal Structure - The Trump administration is negotiating a deal where Oracle would take over TikTok alongside new US investors, with ByteDance retaining a minority stake [1][2] - Trump initially proposed a joint venture where the US would get 50% ownership of TikTok [2] Political and Legal Context - Lawmakers passed a bill last year forcing ByteDance to sell TikTok or face a US ban, which was delayed by an executive order from Trump [1] - Some senators who supported the ban-or-sell bill expressed confusion about Trump's plans and reiterated that the law requires ByteDance to fully divest [3] Potential Buyers - Trump mentioned being open to either Elon Musk or Oracle chairman Larry Ellison buying TikTok [3] - Oracle previously emerged as a potential buyer during Trump's first term, and TikTok later shifted all its US traffic to Oracle servers [3]

Company Overview - GE Vernova (NYSE: GEV) has significant potential to benefit from multiple megatrends over the next decade, particularly through its expertise in the electrification supercycle [1] Analyst Background - The analyst, Michael Del Monte, has over 5 years of experience as a buy-side equity analyst and a decade in professional services across various industries including O&G, OFS, Midstream, Industrials, Information Technology, EPC Services, and consumer discretionary [1] - The analyst employs a macro-value-oriented approach to investment analysis and emphasizes cross-industry analysis in making investment recommendations [1] Analyst Position - The analyst holds a beneficial long position in GE Vernova (GEV) shares, along with positions in Exxon Mobil (XOM) and Oracle (ORCL), through stock ownership, options, or other derivatives [2]

Stock Performance - Oracle's stock closed at $183 60, marking a -1 54% decline compared to the previous day [1] - The stock underperformed the S&P 500 (-0 29%), Dow (-0 32%), and Nasdaq (-0 5%) on the same day [1] - Over the past month, Oracle's shares gained 8 61%, outperforming the Computer and Technology sector (1 8%) and the S&P 500 (2 52%) [1] Earnings and Revenue Projections - Oracle's upcoming earnings per share (EPS) is projected at $1 48, reflecting a 4 96% increase year-over-year [2] - Quarterly revenue is expected to reach $14 36 billion, up 8 12% from the same quarter last year [2] - For the entire year, consensus estimates forecast EPS of $6 22 (+11 87%) and revenue of $57 65 billion (+8 85%) compared to the previous year [3] Analyst Estimates and Valuation - Recent changes to analyst estimates indicate shifting near-term business trends, with positive revisions reflecting confidence in the company's performance [4] - Oracle is currently rated as a Zacks Rank 3 (Hold), with the Zacks Consensus EPS estimate revised downward by 0 52% over the past month [6] - The company's Forward P/E ratio is 29 96, below the industry average of 31 32, and its PEG ratio is 2 95, higher than the industry average of 2 4 [7] Industry Context - The Computer - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 155, placing it in the bottom 39% of over 250 industries [8] - Research shows that industries in the top 50% outperform the bottom half by a factor of 2 to 1 [8]

Project Overview - The Stargate Project is a $500 billion AI infrastructure initiative in the US, described as the largest AI infrastructure project in history [1] - It is a joint venture between Oracle, SoftBank Group, and OpenAI, with immediate deployment of $100 billion [1][2] - The project involves building 10 massive data centers, each 500,000 square feet, starting in Abilene, Texas, with potential sites across the US being evaluated [2] Companies Involved Oracle - Market cap of $521 billion with a 10.7% 5-year annualized EPS growth and a forward P/E of 30.4 [3] - Known for enterprise software and cloud computing services, with its largest acquisition being Cerner for $28.3 billion in 2022 [5] SoftBank - Market cap of $99 billion with a 14% current year and 13.6% next year EPS growth, and a forward P/E of 89.3 [3] - A Japanese investment holding company focusing on tech, with a majority stake in Arm Holdings [6][7] OpenAI - Creator of ChatGPT, powered by generative AI, with Microsoft as a major investor [8] - Responsible for operational aspects of the Stargate Project [6] Nvidia - Market cap of $3.6 trillion with a 35% 5-year annualized EPS growth and a forward P/E of 34.4 [3] - Leading provider of chips and technology for advanced AI capabilities, with GPUs being the gold standard for AI workloads [9] Microsoft - Market cap of $3.3 trillion with a 13.7% 5-year annualized EPS growth and a forward P/E of 36.9 [3] - Known for Windows OS and Azure cloud services, with a $13 billion investment in OpenAI [10] Arm Holdings - Market cap of $175 billion with a 26.5% 5-year annualized EPS growth and a forward P/E of 84.0 [3] - Largest designer of CPU chip architectures, with growth driven by the AI data center market [11] Project Responsibilities - SoftBank has financial responsibility, while OpenAI has operational responsibility, with SoftBank's Son as chairman [6] - Key initial technology partners include Oracle, OpenAI, Nvidia, and Microsoft [6] Stock Performance - Nvidia has the highest projected earnings growth rate at 35% over the next five years, with a reasonable stock valuation of 34.4 times forward earnings [12] - Oracle and Microsoft are considered lower risk compared to Nvidia [12]

Oracle Cloud ERP Leadership - Oracle has been named a Leader in three Gartner reports: 2024 Gartner Magic Quadrant for Cloud ERP for Service-Centric Enterprises, 2024 Gartner Magic Quadrant for Cloud ERP for Product-Centric Enterprises, and 2024 Gartner Magic Quadrant for Financial Planning Software [1] - Oracle was recognized for its "Ability to Execute" and "Completeness of Vision" for Oracle Fusion Cloud Enterprise Resource Planning (ERP) [1] AI-Driven Finance Transformation - Oracle is pioneering AI-driven finance transformation, offering customers a competitive advantage by enabling seamless adoption of AI-driven workflows [2] - Embedded predictive, generative, and agentic AI innovations in Oracle Cloud ERP reimagine core financial functions to drive efficiency, insight, and enduring value [2] - Oracle Cloud ERP's embedded AI enables touchless operations, predictive insights, and connected actions to enhance productivity and redefine finance and operations processes [2] Customer Success Stories - Over 10,000 organizations across various industries and geographies use Oracle Cloud ERP applications [4] - DHL Supply Chain standardized financial processes across 40+ countries, improving efficiency, reducing costs, and accelerating decision-making [4] - Guardian expanded insights, accelerated financial close, and increased efficiency with Oracle Cloud ERP's embedded AI capabilities [4] - Ocado Retail leveraged Oracle Cloud ERP's automation capabilities, controls, and data insights to focus on its mission of changing grocery shopping [4] Key Features of Oracle Cloud ERP - Oracle Cloud ERP offers touchless processes, AI-powered predictive insights, and connected actions to improve productivity and decision-making [4] - The ledger agent automates daily accounting operations and identifies exceptions in transaction data [4] - The generative AI-driven advanced prediction agent supports multivariate AI prediction models for predictive forecasting [4] - Oracle Cloud ERP connects customers with the Oracle B2B network of financial institutions and logistic service providers [4] Comprehensive Enterprise Capabilities - Oracle Cloud ERP provides a comprehensive set of enterprise finance and operations capabilities, including financials, accounting hub, procurement, project management, and supply chain management [5] - The platform helps organizations transact, pay, finance, and ship sustainably across the globe [5]

Investment Strategy - Focuses on identifying growth investing opportunities with attractive risk/reward upside potential [2] - Combines sharp price action analysis with fundamentals investing [2] - Avoids overhyped and overvalued stocks while capitalizing on battered stocks with significant upside recovery possibilities [2] Investment Group - Runs the investing group Ultimate Growth Investing, specializing in high-potential opportunities across various sectors [3] - Focuses on ideas with strong growth potential and well-beaten contrarian plays, with an 18 to 24 month outlook [3] - Designed for investors seeking to capitalize on growth stocks with robust fundamentals, buying momentum, and turnaround plays at highly attractive valuations [3] Analyst Recognition - Recognized by TipRanks as a Top Analyst [1] - Recognized by Seeking Alpha as a "Top Analyst To Follow" for Technology, Software, and Internet, as well as for Growth and GARP [1] - Demonstrates outperformance with picks that generate alpha well above the S&P 500 [1]

Oracle Cloud Infrastructure and CMMC Compliance - Oracle announced a comprehensive set of tools and documentation to help defense contractors comply with the Department of Defense (DoD) Cybersecurity Maturity Model Certification (CMMC) when using Oracle Cloud Infrastructure (OCI) [1] - Defense contractors must comply with CMMC Level 1, 2, and/or 3 by October 15, 2024, over a phased implementation period [1] - The OCI Core Landing Zone automation template and CMMC-specific documentation can significantly ease the compliance process, potentially saving months of manual work [2] OCI Core Landing Zone Features - The OCI Core Landing Zone includes baseline configurations and rules delivered using a standardized Infrastructure-as-Code (IAC) template based on Terraform [4] - Customers can perform one-click, best-practice deployments of preconfigured cloud native services, automatically meeting many CMMC controls [4] - The OCI Landing Zone and associated technical documentation are provided at no additional charge under a customer's contract [6] Oracle US Government Cloud - Oracle US Government Cloud has achieved FedRAMP High JAB P-ATO status and meets NIST SP 800-171 control requirements [5] - The services are priced at the same global pricing as Oracle's commercial public cloud regions and meet DISA Impact Levels 2, 4, and FedRAMP High authorization standards [7] - Oracle US Government Cloud is available in the US East (Ashburn, VA) and US West (Phoenix, AZ) regions [7] Customer Experience and Case Study - GE Aerospace used Oracle US Government Cloud to achieve CMMC Level 2 readiness, delivering a modernization project on time and on budget with performance exceeding the on-premises solution it replaced [3] Additional Resources and Information - Oracle provides an informational guide and controls checklist for CMMC Levels 1 and 2 compliance [6] - OCI Core Landing Zone templates are available within the OCI Console and through GitHub [6]

Market Overview - Tech stocks led the market rally, driven by AI investments and strong corporate earnings [1][2] - The Dow Jones Industrial Average rose 0.3% to 44,156, the S&P 500 gained 0.6% to 6,086, and the Nasdaq Composite added 1.3% to 20,009 [5] - Technology and communication services were the only sectors gaining, while rising interest rates and a stronger dollar weighed on other sectors [3] AI and Tech Sector - The Stargate Project, a $500 billion AI infrastructure initiative by Oracle, OpenAI, SoftBank, and MGX, boosted tech stocks [1] - Nvidia (+4.4%), Microsoft (+4.1%), and Palantir (+5.2%) were among the top performers in the tech sector [4] - Oracle stock surged 6.7% following the Stargate announcement and has gained 12% since January 13, adding over $85 billion in market cap [11] Corporate Earnings Highlights - Netflix (NFLX) surged 9.7% after beating Q4 expectations, raising 2025 revenue guidance, and announcing subscription price hikes [6] - Netflix ended 2024 with over 300 million global subscribers and achieved $10 billion in annual operating profit for the first time [7] - Procter & Gamble (PG) rose 1.9% after beating Q2 expectations and reaffirming its fiscal 2025 outlook, projecting 2%-4% revenue growth [8][9] - GE Vernova (GEV) gained 2.7% despite missing Q4 expectations, reaffirming its 2025 outlook with projected revenue growth of 3%-5.9% [10] Oracle's Performance - Oracle generated a 59% total return over the past 52 weeks, outperforming the S&P 500's 27% gain [12] - Wall Street analysts maintain a Buy consensus on Oracle, with 16 Strong Buy, 6 Buy, 12 Hold, and 1 Strong Sell ratings [12]