For those seeking to attain a robust net worth by the time of retirement, the best bet to stick to would be to buy a stock that has incredible growth potential. Needless to say the optimal stock for this purpose would be one that is not likely to be swept away by the forces of competitive winds. Most importantly, however, if you really want to be a millionaire by the time you retire by holding a particular stock, a stable income would be of utmost importance. A risky bet with high volatility should not be one that you undertake with a retirement-centered investment strategy. A sound example of a stock that meets each of these metrics is Oracle Corporation (NYSE: ORCL). There is much about the stock that makes it ideal to include in your portfolio. Doing so would seriously boost the probability of retiring a millionaire in the future.
Oracle’s Cloud Infrastructure Growth
The 2021 fourth-quarter results had been bleak for most companies. Macroeconomic pressures such as inflation, and supply chain disruptions had impacted the forward-looking outlook for even stock market giants. The management of Oracle, however, remained highly optimistic, which made the company stand out significantly. Although the company’s total revenue had seen a growth of 10%, the cloud infrastructure segment, in particular, caught our interest. This domain brought in a revenue of $2.9 billion, which climbed by almost 40% on a constant currency basis. CEO Safra Catz described this segment as entering a “hypergrowth” phase, during the earnings call.
“Hypergrowth” is not a term that corporate executives throw around so easily, especially when considering the broader macroeconomic stresses. The stock would plummet if this was done without genuine confidence in the company’s growth potential.
Oracle projects this segment to see revenue growth of up to 50% on a year-on-year basis. Total revenue is projected to rise by 20%. These figures are all the more impressive when considering the wider recessionary circumstances. ORCL is proving to be a stock that has a high growth indication in such a bearish market. Once the macroeconomic conditions see an improvement, there is no telling as to how higher this rocket will fly, uninterrupted.
The company has clearly located a strategic advantage in a post-Covid context, fully exploiting its technological expertise within this domain. Oracle takes a unique approach to cloud computing, which evidently gives it an edge over giants such as Amazon and Google. Its cloud infrastructure is defined by openness and interoperability. For example, the company’s strategic partnership with Microsoft allows cloud migration for joint customers. The outcome of this approach is a more dynamic and flexible usage profile, where new applications can be developed.
Oracle’s Healthcare Expansion
Another area of significant promise is that of the company’s healthcare division. Recently, Oracle has been increasing its capital allocation to this lucrative domain. In June 2022, Oracle had closed an acquisition deal on the healthcare expert, Cerner, for $28 billion. Cerner, which is US-based healthcare IT and hardware supplier, gives Oracle a whopping 25% market share within the USA. Given statements of the company’s management, as well as the size of the transaction, there is a clear indication that healthcare will be a primary business domain for the company in the long-term future.
The deal brings a number of advantages to ORCL, which all collectively boost the stock’s long-term growth potential. For one, the partnership enhances efficiency and cost reduction through synergies. Moreover, the coming together of Cerner’s healthcare expertise and Oracle’s full-spectrum mastery will ensure a significant competitive advantage. Considering the prevalent inflationary period, it would be near impossible for industrial rivals to compete against such a cost advantage.
Moreover, the direct competitors of Cerner are typically players that specialize within a niche. With the new partnership, Oracle is likely to emerge as a company positioned to dominate this healthcare area in the future. It strategically plans on achieving this through offering a holistic package of solutions that has smooth integration, higher efficiency, and performance, as well as a significantly larger scale. The partnership would allow clients to eliminate IT-related inefficiencies and costs. Most importantly, enterprise management in the healthcare context would go through a major simplification and streamlining.
A competitive edge of such a nature ensures stable growth and financial sustainability. What better stock to opt for when planning to retire with a portfolio worth at least seven figures in value?
TikTok Delivers Big Win to Oracle
A recent development related to TikTok further boosts Oracle’s future outlook. TikTok announced that it would redirect the data of all US-based customers to the Oracle cloud infrastructure by default. This had come following a privacy scandal dating back to 2020. After allegations that TikTok routinely accesses American users’ private data, then-President Trump threatened to ban the app in the country. Following leaked audio recordings and further media revelations, the app now redirects 100% of all American user data to the Oracle cloud.
The move gives Oracle a boom considering that 100 million Americans use TikTok. It also significantly reduces the gap between the company and its much larger competitors, Amazon and Google. From a forward-looking standpoint, such a boost significantly elevates the company’s long-term growth prospects. It further adds to the reasons why investors must not ignore ORCL, especially in terms of a stellar portfolio at retirement.
Successful investors are those that do not invest in the present; rather, they make a commitment to invest in the future. On this basis, there hardly is a better investment option to consider than Oracle. The company continues to break records despite the wider bearish conditions. Moreover, luck definitely seems to be on the part of Oracle, which only spells more good news for its shareholders.
There is no better time to buy ORCL than right now. The company has laid out its plans in a highly strategic manner, and the execution is what will follow. As soon as the market sees the apparent growth potential, its price will shoot up.