3 Reasons to Buy Oracle After Unprecedented Move to All-Time High

We’re supposed to buy low and sell high. It goes against every instinct to buy high.

But buying high can sometimes be the right thing to do.

On Wednesday, Oracle ORCL shares jumped 35% on extremely high volume. That volume, 131.6 million shares traded, is telling us that institutional investors are willing to commit to buying this stock at an all-time high. 

Panic Buying?

Why the rush to buy Oracle? Maybe institutional investors wanted to rotate out of some winners and into a stock they may have overlooked. Despite Wednesday's gain, Oracle isn't in the Trillion Dollar Club. There is a different kind of rotation happening in the markets right now, as described here.

Make no mistake, what I saw on Wednesday looked like panic buying. It happened at a scale that can only be achieved by institutional investors.

Oracle’s volume wasn’t just high — it was extraordinarily high. I went through 10 years of data, and I couldn’t find a higher volume day for this stock.

I’m not going to go into the specifics of Oracle’s earnings report. Sarge already covered that in great detail, and it’s a must-read. He’s skeptical about Oracle’s earnings report for the just-ended quarter.

Another colleague, Doug Kass, is also skeptical. In fact, he shorted Oracle at $333 on Thursday morning. 

I respect my colleagues immensely. But while I agree with everything Sarge wrote in his article, and I hate to take the other side of one of Doug’s trades, I’m taking a small long position in Oracle. Here's why.

3 Reasons Why I'm Buying Oracle

1. Generally, institutional investors know what they’re doing. They have an army of analysts at their disposal. I always assume institutions know something that the rest of us don’t know. Whatever information they possess is causing them to buy this stock at its all-time high, in unprecedented volume.
2. Oracle is a winner. The stock has quietly put together a massive win streak. Oracle has reaped double-digit returns for investors in six of the past seven years, including a 58% gain in 2024.
3. I’m buying the stock well off its highs. Oracle has pulled back after Wednesday's outsized gain, so I’m able to take a small position (one-third of normal size) at $311. I’ll add to that position if warranted. 

Bottom Line: Follow The Money

Wednesday’s price action in Oracle wasn’t just bullish, it was unprecedented. I'm simply following the money. Institutions are willing to make a major commitment to this stock at its current price, and I'm following their lead. 

At the time of publication, Ponsi was long ORCL.