Tech giant Oracle (ORCL) is luring the U.S. government with huge discounts on its software and cloud computing services, according to the Wall Street Journal. The move comes as more tech companies compete for federal business in an attempt to boost the adoption of their software and services. ORCL stock has rallied more than 40% over the past month on momentum in the company’s cloud business amid the ongoing AI (artificial intelligence) boom.
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Oracle Offers U.S. Government Massive Discounts
Citing the General Services Administration (GSA), the Wall Street Journal’s report highlighted that Oracle is offering the federal government a 75% discount on its license-based software, including databases and analytics, along with a “substantial” discount on its cloud service through the end of November.
In fact, the GSA stated that the agreement with Oracle is the first of its kind, as it provides the entire government with a discount on cloud infrastructure. The deal with Oracle is the latest in a series of agreements that the agency has signed with large U.S. tech companies as part of the federal government’s efforts to modernize through technology. In May, the GSA stated that Salesforce (CRM) had offered the U.S. government a 90% discount on its messaging app Slack through the end of November. Also, Adobe (ADBE) and Elastic (ESTC) have reached similar agreements with the federal government to offer their software at lower costs. Alphabet’s Google (GOOGL) has also struck a deal to offer its software, like the Workspace suite, at a discount to U.S. federal agencies.
Meanwhile, Oracle’s deal also involves providing the federal government with access to its AI services and special assistance in shifting its IT systems to the cloud. The Trump administration is focused on generating savings from its deals with federal contractors, including consulting firms and tech companies such as Oracle. For Oracle, the federal business helps to enhance the adoption of its cloud services and boost its revenue.
Is Oracle Stock a Buy, Sell, or Hold?
Optimism about acceleration in Oracle’s cloud business is increasing. Recently, Brad Reback, a 5-star analyst from Stifel, upgraded Oracle stock to Buy from Hold, citing optimism about the strength of the company’s cloud business.
Overall, Wall Street has a Moderate Buy consensus rating on Oracle stock based on 21 Buys and 11 Holds. The average ORCL stock price forecast of $220.11 indicates a possible downside of 7.3% from current levels. ORCL stock has risen more than 42% year-to-date.
