Oracle Stock Could Fly Higher on TikTok Deal
Oracle stock price is likely to get a new bullish price target from market analysts as the software company is all set to acquire TikTok US operations. Reports show that TikTok has rejected Microsoft offer, announced to partner with Oracle for US operations.
The Chines social media app TikTok was forced by the US government to sell its US operations.
TikTak and its parent ByteDance has been considered as a threat to US national security. US state sectary Mike Pompeo and President Donald Trump repeatedly threatened to ban the app.
“There’s a bit of a reciprocity process going on here, since China doesn’t allow U.S. tech companies like Facebook and Google,” said Paul Triolo, head of global technology policy at the Eurasia Group.
“All of these actions are part of an effort by China hawks in the U.S. government to push for this decoupling, which includes a whole range of issues but has sort of crystallized in the last three to six months into this view that Chinese companies are untrusted vendors,” Paul Triolo added.
Shares of software giant have lost the upside momentum after hitting a 52-weeks high of $61 last week amid the broader tech market selloff. However, Oracle stock price is now likely to get new support from the TikTok deal.
The company has recently reported stronger than expected first-quarter results. Its first-quarter revenue jumped sharply from the year-ago period while operating expenses dropped significantly due to margin expansion strategies.
Its cloud services and license support revenue came in at $6.9 billion. Revenue from cloud applications businesses jumped at a high double-digit rate, with Fusion ERP up 33% and NetSuite ERP gained 23%.
“We now have 7,300 Fusion ERP customers and 23,000 NetSuite ERP customers in the Oracle Cloud. Our infrastructure businesses are also growing rapidly as revenue from Zoom more than doubled from Q4 last year to Q1 in this year,” says CEO Safra Catz.