The ink on the paper for any deal between Oracle (ORCL) and TikTok is far from dry. But that hasn’t stopped Wall Street from speculating on how any tie-up would jump-start long sluggish growth at Oracle.
“Oracle is super late to the cloud. Why the deal [with TikTok] is so important for Oracle — and a great coup for Larry Ellison... number one, it would be a huge cloud deal. Snapchat did a $2 billion cloud [services] deal with Google. TikTok is supposedly paying Google $800 million [for cloud services that would go to Oracle]. Number two, it would be a great reference customer for Oracle, who is behind Amazon and Microsoft and Google in the cloud. This is a way to help them catch up,” said JMP Securities software analyst Pat Walravens on Yahoo Finance’s The First Trade.
To be sure, the fate of TikTok — and Oracle’s bottom line — hangs in the balance.
Oracle is reportedly nearing a partnership deal with TikTok that will see it own a roughly 20% stake in the company. Walmart will reportedly join in the partnership.
A Walmart spokesperson declined to comment to Yahoo Finance on any deal with Oracle and TikTok.
“Walmart continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties. We know that any approved deal must satisfy all regulatory and national security concerns,” Walmart said last weekend.
It’s unclear if President Trump — who has pushed for the sale of TikTok on national security concerns — will sign off on the deal. A White House spokesperson declined to comment to Yahoo Finance on the timing around any decision by the president.
But the market clearly has made up its mind — it sees TikTok lifting Oracle’s flagging profits. Oracle shares are up 10% over the past month versus the 2% drop in the Nasdaq Composite. Keep in mind Oracle’s stock has badly lagged the tech rally of the last five years (64% gain for Oracle vs. 125% pop for the Nasdaq) in large part due to the company being late in shift to cloud services.
That was again evident in Oracle’s most recent quarter.
Oracle’s fiscal first quarter sales rose a meager 2% year-over-year. For the fiscal year ended May 31, total revenue dropped 6% year-over-year.
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