Oracle's AI Potential Shines Despite Earnings Miss, While C3.ai's Rally Raises Caution

Jim Cramer: 'I'd Be A Buyer' After Oracle Earnings Dip, But Will 'Take Something Off The Table' On C3.ai Rally - Meta Platforms (NASDAQ:META), C3.ai (NYSE:AI)

Jim Cramer urged investors on Tuesday to view Oracle Corp. ORCL as a buying opportunity following its post-earnings decline, while cautioning against chasing C3.ai Inc. AI despite its recent strength. What Happened: Oracle shares dropped 6.67% on Tuesday after the enterprise software giant reported fiscal second-quarter earnings that missed Wall Street expectations. The company posted adjusted earnings of $1.47 per share on revenue of $14.06 billion, falling short of analysts' estimates of $1.48 per share and $14.11 billion respectively. "I'd be a buyer of Oracle after this pullback, because the most important parts of the business are still doing great," Cramer said on CNBC. He attributed the miss to one-time issues, noting that Oracle's core cloud infrastructure and AI businesses continue to show strong performance. Oracle's management reported that demand continues to outpace supply, highlighting partnerships with prominent tech companies including OpenAI, xAI, Cohere, NVIDIA Corp. NVDA, and Meta Platforms Inc. META. See Also: GameStop Q3 Earnings: Revenue Miss, $4B+ Cash, No More Offerings Planned In Fiscal Year Why It Matters: However, Cramer expressed caution about C3.ai, which saw its stock rise initially after beating quarterly expectations before settling to a 0.12% gain. "If you own it, take something off the table," he advised, citing concerns about the company's revenue growth rate and continued losses. The contrast between the two companies highlights the current market dynamics around AI stocks. While Oracle's pullback represents an opportunity in a fundamentally strong business, Cramer suggested C3.ai's rally might be driven more by AI enthusiasm than fundamentals. RBC Capital Markets analyst Rishi Jaluria maintained a Sector Perform rating on Oracle with a $165 price target, noting that while third-quarter guidance was light, the company's cloud revenue outlook remains strong at $25 billion for the full year. Read Next: Gamestop, US Steel, Walgreens, Rigetti Computing, Tesla: Why These 5 Stocks Are On Investors' Radars Today Image Via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Jim Cramer suggests Oracle can be bought on weakness and C3.ai sold into strength

CNBC's Jim Cramer on Tuesday compared Oracle and C3.ai, enterprise software companies in the spotlight as Wall Street continues to flock to many stocks involved with artificial intelligence. He advised buying Oracle on weakness and selling C3.ai into strength. "I'd be a buyer of Oracle after this pullback, because the most important parts of the business are still doing great," he said. "As for C3.ai, if you own it, you know what? I'd take something off the table. But for the love of god, don't try to short the darn thing, it's got AI in its name -- that's a disaster in this market." Both companies reported earnings Monday night. Oracle proceeded to have its worst day of the year, and shares were down 6.67% by Tuesday's close as its quarter failed to impress. C3.ai stock jumped during the day's session as the company beat expectations -- it declined somewhat by close, but still managed to finish up 0.12%. Cramer chalked up Oracle's miss on "headline numbers" to one-off issues, adding that if not for a loss on a non-core investment, guidance for the current quarter may have been stronger. Its important businesses -- namely cloud infrastructure and AI -- are doing well, and management indicated that demand continues to outpace supply, Cramer said. He also pointed out that Oracle boasted a series of high-profile customers, including Open AI, xAI, Cohere, Nvidia and Meta. But Cramer noted there are a large number of companies running hot just because they're related to AI, and C3.ai could be among them. He said its revenue growth isn't that fast, and the company is still losing money. Although some investors were impressed by C3.ai's partnership with Microsoft, Cramer wondered if the move will actually end up hurting profitability. While the initiative could help sales, C3.ai will be making big investments to support it, he said. To Cramer, Oracle's pullback may be a unique chance to get in on a solid company. The quarter's narrow miss is a result of inflated expectations, he said, stressing that the company's AI business is promising. "It's a fabulous company, red-hot stock, finally giving you a better entry point," he said. "After today's pullback...I don't know how much cheaper it's going to get." Oracle and C3.ai did not immediately respond to request for comment.