Oracle's AI Insights Spark Interest in Micron and DigitalOcean

A recent report highlights insights from Oracle's Chairman, Larry Ellison, on the booming AI sector. With significant growth predicted, companies like Micron Technology and DigitalOcean are positioned well to capitalize on this trend, influencing potential investment decisions.

Date: 15-09-2024

AI Rating: 7

In the report, Oracle's Chairman Larry Ellison reflects on the ongoing and future growth of the artificial intelligence (AI) industry. He predicts that business spending on AI development will continue to grow significantly for at least the next decade, which paints a positive outlook for companies in this sector. This information could prompt investors to consider stocks related to AI, particularly those of Micron Technology and DigitalOcean.

Micron Technology has showcased impressive performance, particularly in its fiscal 2024 third quarter, where it reported an 85% increase in data center revenue and a remarkable 94% increase in mobile segment revenue. These growth figures indicate that demand for AI-driven applications is strong, suggesting a robust revenue pipeline. In fact, analysts forecast that Micron will generate $25 billion in revenue for fiscal 2024, representing a substantial 61% growth from the previous fiscal year, and $38.8 billion for fiscal 2025, which reflects further growth of 53%.

Moreover, the company's strong earnings per share (EPS) projection of $9.41 in fiscal 2025, gives it a forward price-to-earnings (P/E) ratio of just 9.6, indicating that the stock may be undervalued compared to peers like Nvidia.

DigitalOcean is capitalizing on the demand for AI cloud services targeted at small and mid-sized businesses (SMBs). The company has seen a 200% surge in revenue attributable to AI, indicating strong adoption among its targeted customer base. With $192.5 million in revenue during the second quarter, this positive growth trend positions DigitalOcean favorably within the market.

Both companies exhibit strong growth metrics making them attractive for investment in light of Ellison's insights, suggesting that the AI boom is just beginning and that stocks in this sector could yield strong returns in the foreseeable future.

Stocks: MU DOCN