Oracle and Sea Limited Drive Growth in Bullish Market

The report highlights significant growth in the S&P 500, driven by technology stocks like Oracle and Sea Limited. Both companies show strong revenue growth and market potential as interest rates decline, suggesting positive implications for future stock prices.

Date: 15-10-2024

AI Rating: 7

The report outlines a vibrant market environment with the S&P 500 rising by 22% this year, largely influenced by the technology sector. Notably, the report emphasizes the impressive performance of two key players: Oracle and Sea Limited.

Oracle's Performance

Oracle's Oracle Cloud Infrastructure (OCI) generated $2.2 billion in revenue during its fiscal 2025 first quarter, marking a 45% increase from the previous year. This substantial growth reflects Oracle's strong market position and adaptation to the AI-driven tech landscape.

Additionally, Oracle secured 42 new deals for GPU capacity valued at $3 billion, contributing to a record remaining performance obligation of $99 billion, which is a 52% increase from a year ago. This backlog signals a robust future revenue stream as AI developers await more data centers.

The company's current price-to-earnings (P/E) ratio of 45.3 is substantially above the Nasdaq-100 index's average of 32.1. However, if Oracle successfully expands its data center footprint as projected, it might appear undervalued from a forward earnings perspective.

Sea Limited's Growth

Similarly, Sea Limited has demonstrated impressive growth, achieving a total revenue of $3.8 billion across all segments, representing a 23% increase year-over-year. This marks the strongest growth in two years, showcasing Sea's potential in e-commerce.

Although Sea Limited reported a net income of $79.9 million, the trend of declining average revenue per user in its digital entertainment segment could change with falling interest rates, which may boost consumer spending power.

Sea's stock has skyrocketed by 158% this year but remains significantly below its prior high, trading at a price-to-sales (P/S) ratio of just 4, well below its long-term average of 9.6, indicating substantial room for growth.

Stocks: ORCL SE