We recently compiled a list of the 11 best enterprise software stocks to invest in.In this article, we’ll take a look at where Oracle Corp. (NYSE:ORCL) compares to the other enterprise software stocks.
Enterprise software includes applications designed for large organizations to manage functions such as data analytics, sales, marketing and customer service. These solutions prioritize scalability, high user capacity and seamless integration with existing systems. Grand View Research reported that the global enterprise software market is valued at $263.79 billion as of 2024 and is expected to grow at a compound annual growth rate of 12.1% between 2025 and 2030. North America accounted for 41% market share of the global enterprise software industry in 2024.
Key trends such as Industry 4.0, digitalization and the rise of connected devices contribute to the demand for automated and integrated solutions. The shift to hybrid working models has increased the adoption of enterprise software in sectors such as healthcare and education. In healthcare, enterprise software improves hospital management and electronic medical records. Data security and privacy are critical market drivers as organizations prioritize protecting sensitive information and complying with GDPR and HIPAA regulations.
Cloud-based enterprise software is expected to dominate the market share by more than 55% by 2024 due to its accessibility and affordability, while on-premise solutions will gain momentum as organizations seek greater customization and data security. Large enterprises accounted for over 62% of the market share, driven by the need to efficiently manage complex workflows. The IT and telecom sector was the leader with more than 20% market share in 2024.
On December 11, SoFi’s Liz Young Thomas, head of investment strategy, and Angela Mwanza, private advisor to Rockefeller Global Family Office, joined CNBC’s ‘Closing Bell’ to discuss their market outlook and discuss the recent performance of technology stocks. Mwanza expressed a strong bullish outlook for the software sector as the new year approaches. She noted that while mega-cap tech stocks are highly valued, that doesn’t mean they are overvalued. She suggested rebalancing portfolios to reduce concentration in these large-cap names while recognizing their growth potential. She highlighted that MAG7 stock has lagged the broader S&P 500 over the past six months, signaling a market widening that could fuel software investment.
Thomas supported this bullish sentiment by highlighting the resilience of software stocks amid recent volatility in momentum stocks, especially high-growth names. While some mega-cap stocks have seen dramatic gains over the past year, some up to 900%, others have struggled. Looking to 2025, Thomas predicted uneven performance across the technology landscape and advised investors to focus on software companies. She expressed stronger bullish sentiment toward this segment, suggesting that software stocks are well positioned for continued growth as they head into the new year.
Methodology
We first scoured ETFs, online rankings, and internet lists to compile a list of the best business software stocks. We then selected the eleven stocks that were most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of the third quarter of 2024. The hedge fund data comes from Insider Monkey’s database, which tracks the moves of more than 900 elite money managers.
Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research shows that we can outperform the market by imitating the best stock picks from the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (Ssee more details here).
Is Oracle Corporation (ORCL) the best edge computing stock to invest in, according to analysts?
A team of IT professionals who meticulously design a large-scale enterprise performance management system.
Number of hedge fund holders: 91
Oracle Corp. (NYSE:ORCL) is a software provider that offers comprehensive cloud solutions through Oracle Cloud Infrastructure (OCI), which provides a range of cloud services including compute, storage and networking capabilities. Additionally, Roving Edge Infrastructure extends cloud capabilities to remote locations, enabling real-time data processing and analysis with limited connectivity.
The cloud services and licensing support segment includes a range of offerings, including cloud computing services such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS), as well as the ongoing support and maintenance services related with the company’s software licenses.
Cloud services, especially within OCI, grew due to increasing demand for AI workloads, the company’s competitive pricing and performance benefits, and the flexibility offered by various deployment options. License support plays a vital role in ensuring smooth and uninterrupted operation of Oracle software for customers.
In FQ2 2025, this segment generated $10.8 billion in revenue, reflecting a 12% year-over-year increase. This constituted 77% of the total revenue generated this quarter. This integrated approach enables Oracle Corp. (NYSE:ORCL) to meet the diverse needs of its customers, from providing advanced cloud solutions to ensuring the seamless operation of their existing software investments.
Parnassus Value Equity Fund stated the following about Oracle Corporation (NYSE:ORCL) in its Q3 2024 letter from an investor:
“Oracle Corporation (NYSE:ORCL) reported second-quarter results that exceeded consensus expectations, driven by growth in its cloud infrastructure business, which is benefiting from demand for AI applications. Investor sentiment was further boosted by the company’s announcement of a new partnership with Amazon.”
In short, ORCL is in 4th place on our list of the best enterprise software stocks to invest in. While we recognize the potential of ORCL as an investment, our belief lies in the belief that AI stocks are promising as they deliver high returns within a shorter time frame. If you’re looking for an AI stock that’s more promising than ORCL, but trades at less than five times earnings, check out our report on the cheapest AI stocks.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now And The 30 most important AI stocks according to BlackRock.
Disclosure: None. This article was originally published on Insider Monkey.
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