Video Length: 00:14:18

Should you buy Oracle stock (ORCL) on the TikTok partnership talks? Would TikTok make Oracle more attractive, or was it already attractive but it wasn’t getting enough attention? What exactly does Oracle even do and who are its competitors? Am I planning to buy Oracle stock shares and if so, at what price?

In this video, I analyze the Oracle stock from 5 points of my signature Invest Diva Diamond Analysis (IDDA) which analyzes any asset from 5 points: fundamentals, technicals, market sentiment, risk assessment, and overall how it can fit in your portfolio.

Oracle was among the companies I really wanted to work at when I was an electrical engineering student in Japan.  I even interviewed at their Tokyo office.  But I didn’t get the job. Which turned pretty well for me in the long run but at the time I was devastated. 

What Does Oracle Do?

Oracle sells a wide range of enterprise IT solutions, including databases, middleware, applications, and hardware. Right now the company is undergoing a mix shift toward cloud-based subscriptions. But they’ve been losing market share to competitors. Amazon Web Services (AMZN). Microsoft Azure (MSFT), and Google Cloud (GOOG) are among its competition. This explains why they went after TikTok and offered such a high bid to outbid Microsoft; Perhaps to put themselves back on the map by becoming TikTok’s designated cloud infrastructure provider.

Why Does a TikTok Partnership Make Sense for Oracle?

Besides keeping up with the competition,

this could also be looked at from a data perspective. Whoever has more data is the winner. Microsoft already owns Linkedin (LNKD), which goes more with its professional branding anyway. Facebook (FB) owns Instagram and Whatsapp. They didn’t even want to get in the TikTok deal. That’s because that would have added to the problems they already have with privacy issues. Additionally, they need to avoid becoming a monopoly in the social media sector. Otherwise, they’d risk getting broken apart by the US government.

Moreover, given that Oracle was starting to look like a dinosaur in the tech field, the association with Gen-z favorite, TikTok, would help them branch out in terms of branding.

So, being a huge TikTok addict myself, I’d be pretty happy to see this deal go through. Because it appears to be a win-win situation: it would allow Oracle to get TikTok as a major customer of Oracle Cloud, it’ll give the U.S. government a sense of ease that Oracle will be behind securing  TikTok’s U.S. data, all while Oracle does not have to invest the cash required to own the business outright.

Oracle Stock Analysis: Fundamentals

Now obviously the TikTok story is still developing and there’s still a lot more that needs to be discussed. But as of now, it looks like Oracle will be TikTok’s partner in the U.S., which implies it is unlikely there will be a complete sale of the U.S. operations from TikTok’s parent company, ByteDance, to Oracle.

One interesting point is that Oracle actually has close ties to the Trump administration, so that could help the review process by the White House.

Oracle has a 186.085B market cap standing well behind Microsoft’s 1.5 Trillion dollars, Google’s 1 Trillion,  and Amazon’s 1.5 Trillion dollars in market cap. By owning Oracle stock shares, you’ll be getting paid a 1.6% dividend yield on a quarterly basis and their earnings won’t be coming up until December 10th, so we don’t have that volatility to worry about at the moment. 

Oracle Stock Analysis: Market Sentiment

Talking about volatility, the market sentiment for Oracle was pretty blah before the TikTok talks started with the majority of investors maintaining their neutral position when it comes to its stock. 

But what’s interesting, is that even though Oracle was NOT getting much hype or attention at all, its stock price has been moving up pretty consistently since 2002. Even the 2008 market crash didn’t impact its stock price by a lot and the firm was able to bounce back up literally within 6 months, which is pretty impressive. After the COVID pandemic crash in March, Oracle was again able to erase its losses within 6 months and reached a new all-time high last week.

Oracle Stock Market Sentiment – Seeking Alpha

Now, of course, the gains haven’t been as dramatic as some other tech stocks like Nvidia (NVDA) that I covered last week (who by the way is planning to buy chip designer, Arm, from Japan’s Softbank for $40 billion in one of the industries largest acquisitions ever. My long-term strategy for Nvidia has not changed.

Oracle Stock Analysis: Technical Analysis

Now let’s get more into price action analysis to identify key psychological levels and my recent price targets.

(Click on image to enlarge)

Oracle Stock Analysis – Technical Analysis

The price remains above the daily Ichimoku cloud after reaching all-time high levels.

However, it remains volatile on TikTok talks. We could see pullbacks towards 56 and 53 in the medium term.