Oracle’s stock soared due to the revelation of four major contracts worth billions of dollars linked to the growing demand for computing power in artificial intelligence. Companies engaging in the training and operation of advanced AI models, such as OpenAI and xAI, are investing heavily in cloud infrastructure, driving a surge in industry spending.
The rise in price propelled Oracle shares up by nearly 37% to US$345.69 by midday trading. This increase added approximately US$234 billion to Oracle’s market capitalization, bringing the company’s total value to around US$913 billion. This puts Oracle within striking distance of the trillion-dollar milestone, a feat achieved by only a few companies like Apple, Microsoft, and Nvidia.
The momentum continued to build following reports from the Wall Street Journal detailing a substantial contract worth approximately US$300 billion that OpenAI signed with Oracle. This five-year deal stands as one of the largest cloud agreements on record, with the majority of Oracle’s new revenue stemming from this particular arrangement.
Ellison, who holds about 41% of Oracle’s shares, witnessed a significant increase in his fortune, rising by around US$100 billion to US$392.6 billion, according to estimates from Forbes. While Musk’s wealth still leads at US$439.9 billion, the gap between them has notably narrowed. Investors are closely monitoring whether Ellison’s net worth could surpass Musk’s if Oracle’s stock continues its upward trajectory.
Investors have been increasingly shifting towards AI-focused cloud stocks, anticipating the substantial growth potential of companies providing the infrastructure for AI technology. Oracle’s shares have surged by 45% since the beginning of the year, with many attributing the company’s success to Larry Ellison’s strategic positioning to capitalize on AI spending. Oracle’s stock performance has outpaced both the S&P 500 and the group of tech giants known as the Magnificent Seven.
During a post-earnings call, CEO Safra Catz indicated the expectation for further growth ahead. “Over the next few months, we anticipate securing several additional multi-billion-dollar customers, with RPO likely to exceed half-a-trillion dollars,” she stated.
While the broader cloud market remains dominated by Microsoft, AWS, and Google Cloud, collectively controlling about 65% of the global cloud market, Oracle competes alongside Alibaba and CoreWeave for the remaining market share. Oracle has garnered attention by forging partnerships with rivals, expanding both its cloud presence and Ellison’s influence in the industry. Collaborations with Amazon, Alphabet, and Microsoft now enable customers to utilize Oracle Cloud Infrastructure (OCI) alongside native services, leading to a more than sixteen-fold increase in revenue from these agreements in the first quarter.
Oracle’s growing involvement in AI infrastructure has connected the company to significant projects beyond its network. Analysts have highlighted Oracle’s participation in Stargate, an initiative spearheaded by SoftBank and OpenAI that could potentially funnel up to US$500 billion into data center development. For Ellison, who has long advocated for Oracle’s deeper integration into cloud computing, Stargate represents both a financial and strategic victory. Analyst Ben Reitzes from Melius Research suggested that the latest revenue figures now encompass contributions from Stargate and “two other major AI players,” implying that long-term revenues could extend well beyond 2026.
The company also boasts Elon Musk’s xAI among its clientele, underscoring Ellison’s connections to Musk, who has often sought his support in various technology ventures.
The positive momentum from Oracle’s rally spilled over into other sectors of the market. Chipmakers like Nvidia, Broadcom, and Advanced Micro Devices, which supply semiconductors for large data centers, witnessed stock increases ranging between 2% and 8%. Shares of CoreWeave, another competitor in cloud services, rose by approximately 15%.
At the time of writing, Oracle’s share valuations are in line with those of its peers. The stock is currently priced at about 33 times projected 12-month earnings, compared to 32 times for Amazon and 31 times for Microsoft. Investors appear willing to pay a premium based on expectations that Oracle’s recent contracts will sustain strong revenue growth in the years to come.
(Photo by BoliviaInteligente)
See also: Oracle integrates GPT-5 into databases and cloud apps
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