On Wednesday, the day the Nasdaq gained a record 103.16 points as concerns about inflation abated, software company Oracle Corp. (Nasdaq: ORCL) was the darling of Wall Street. Shares of Oracle, which develops software that powers companies including Amazon.com and Excite, climbed more than 31 percent, rising 7-13/16 to 32-15/16.
Last Tuesday, Oracle reported fourth-quarter net income of $527.4 million, or 36 cents a share. The consensus estimate of analysts was 32 cents. There was concern that the Y2K crisis could hurt Oracle’s revenues because the company’s clients have to use some of their budget to become Y2K compliant. However, Oracle’s yearly sales rose to $2.94 billion, 22 percent higher than last year.
Investors are encouraged because Oracle’s strong earnings could mean that Y2K may not be as big of a problem as many people believe. A frenzy surrounded Oracle stock on Wednesday as more than 101 million shares were traded, compared to the average volume of less than 20 million shares.
Oracle looks like an attractive stock because it’s a solid Internet infrastructure play. It’s not nearly as volatile as a pure-play Internet stock, but it stands to benefit greatly as the Internet and e-commerce continue to grow.