What's Driving Oracle Stock Now? Irony.

Why is Oracle (NYSE: ORCL  ) stock up over the past month? A healthy market helps, to be sure. But a deal with salesforce.com (NYSE: CRM  ) might also have something to do with it, says Fool contributor Tim Beyers in the following video.

According to a June press release, Salesforce is going to "standardize" on a number of Oracle products -- including hardware. Talk about irony. Salesforce was, at one time, best known for using off-the-shelf gear to construct the world's largest cloud computing platform. Now Oracle takes over.

Can you imagine? Salesforce chief Marc Benioff has said Oracle was selling customers a "false cloud." Now the company is trusting at least some of its clients to the database king's tech.

Interestingly, the news came ahead of yet another strong quarter from Salesforce's closest peer in cloud computing, NetSuite (NYSE: N  ) . Revenue grew 35% as the company beat the consensus earnings estimate by $0.03 a share. The stock is about to cross $100 for the first time.

Oracle CEO Larry Ellison owns a meaningful chunk of NetSuite shares, which means he's been profiting from the cloud even while downplaying importance. Now -- finally, with the Salesforce agreement -- his company gets to say the same.

Will it matter? Please watch the video to get Tim's full take, and then let us know whether you would buy, sell, or short Oracle stock at current prices. We'll pay you back with a tip.

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  • Report this Comment On August 07, 2013, at 10:24 AM, PSA139 wrote:

    I have been watching oracle for a while and as far as I can tell it is the condition of the market that is keeping it down. I believe that if we ever have a good bull run there will be no stopping oracle until it hits 70.00 to 75.00 per share.

    I look at SEC records and some of the companies that you and others recommend show neg. returns yet they are still recommended. Oracle has a very strong grow record for the biggest part of ten years. If MR Market would see it. I say again there would be no stopping oracle. I am just waiting for that to happen and get in on the front of it.

  • Report this Comment On August 07, 2013, at 4:22 PM, banmate7 wrote:

    @PSA139

    I totally agree. First of all, SF has always significantly used Oracle. This latest deal simply ratifies it to the nth degree.

    Secondly, Oracle provides IAAS & PAAS components of the cloud computing stack, as well as diversified SAAS. Nobody should underestimate what diversified SAAS means...integrated apps with common data models, requiring less identity management, and offering opportunities for advanced analytic algorithms...things not tenable across multiple SAAS vendors.

    Oracle, IBM, SAP, and MSFT, along with newer companies like Google and Amazon, are the best best to stand the test of time. I am not sure the same can be said of money burning companies like SalesForce or Workday that are pure SAAS companies in narrow application domains.

    I might be wrong, but it would not surprise me if Oracle eventually acquires SalesForce. Seems natural to me, especially if the market normalizes SalesForce's valuation...which is astronomical right now.

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