Oracle (ORCL) stunned Wall Street on Wednesday, with shares soaring 31% in premarket trading after the company projected $500 billion in future cloud revenue. The jump reflects unprecedented demand for AI-driven infrastructure, turning Oracle from a longtime cloud laggard into a leading AI player.
With the surge, the company’s market capitalization could top $878 billion, adding roughly $208 billion in value, highlighting the growing investor appetite for AI cloud bets.
The premarket rally lifted broader tech sentiment, with chipmakers AMD (+3.2%), Nvidia (+1.96%), and Broadcom (+2.28%) seeing gains.
Oracle reported signing four multibillion-dollar contracts in Q1, including deals with OpenAI, Meta, xAI, and Nvidia, fueling optimism for AI infrastructure adoption.
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Its Oracle Cloud Infrastructure (OCI) revenue is expected to grow 77% this fiscal year, hitting $18 billion and reaching $144 billion over the next four years—well above Wall Street’s expectations.
Analysts say this transformation has major market implications. Oracle’s efficiency in scaling cloud operations, combined with AI demand, challenges competitors like Amazon Web Services and Microsoft Azure.
Investors are closely watching how Oracle manages computing capacity to meet surging inferencing demand. With the AI boom reshaping cloud adoption, Oracle’s growth could signal a broader tech rally, but also raises questions about sustainability, capacity, and competition in the high-stakes AI infrastructure race.
Oracle now forecasts its cloud infrastructure revenue to grow 77% this fiscal year to $18 billion, with the business expected to expand to $144 billion over the next four years. That’s nearly 60% above Wall Street expectations and puts Oracle’s growth trajectory closer to Amazon Web Services, which posted $107 billion in revenue last year.
Beyond OpenAI, Oracle has cut deals with Amazon, Alphabet, and Microsoft to run Oracle Cloud Infrastructure inside their platforms, with revenue from these partnerships up an eye-popping 1,529% in Q1.
Morningstar analysts noted Oracle’s participation in Stargate, the $500 billion AI supercomputer project backed by SoftBank and OpenAI, cements its role in both AI training and inferencing workloads — the latter widely expected to eclipse the training market in scale.
That premium reflects investor confidence that Oracle’s capital-light model — spending less on real estate and maximizing hardware efficiency — can deliver faster growth with lower investment compared to rivals. The company raised its annual capex forecast by $10 billion to $35 billion, still well below the hundreds of billions peers are deploying for AI data centers.
If sustained, the surge would not only reprice Oracle’s role in the cloud economy but also reshape the wealth rankings at the top: Ellison’s fortune, tied to his 41% ownership stake, could soon challenge Musk’s.
Meanwhile, rival cloud leaders Amazon, Microsoft, Alphabet, and Meta are expected to spend over $350 billion on AI-related infrastructure this year, with that figure topping $400 billion by 2026, according to industry forecasts.
Oracle’s rapid growth has raised questions about whether it can secure enough chips and infrastructure capacity to keep up with contracts, especially as competitors also face supply constraints.
Oracle shares surged due to a forecast of $500B AI cloud revenue and multibillion-dollar deals with OpenAI, Meta, and Nvidia, signaling massive growth in Oracle Cloud Infrastructure.
Q2: How is Oracle’s AI cloud surge affecting other tech stocks?
The premarket rally boosted peers: AMD +3.2%, Nvidia +1.96%, Broadcom +2.28%, reflecting heightened investor confidence in AI infrastructure and enterprise cloud demand.
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With the surge, the company’s market capitalization could top $878 billion, adding roughly $208 billion in value, highlighting the growing investor appetite for AI cloud bets.
The premarket rally lifted broader tech sentiment, with chipmakers AMD (+3.2%), Nvidia (+1.96%), and Broadcom (+2.28%) seeing gains.
Oracle reported signing four multibillion-dollar contracts in Q1, including deals with OpenAI, Meta, xAI, and Nvidia, fueling optimism for AI infrastructure adoption.
ALSO READ: US stock market futures today: Dow slips while S&P 500 and Nasdaq edge higher as Wall Street braces for inflation data — Top stocks to watch today
Its Oracle Cloud Infrastructure (OCI) revenue is expected to grow 77% this fiscal year, hitting $18 billion and reaching $144 billion over the next four years—well above Wall Street’s expectations.
Analysts say this transformation has major market implications. Oracle’s efficiency in scaling cloud operations, combined with AI demand, challenges competitors like Amazon Web Services and Microsoft Azure.
Investors are closely watching how Oracle manages computing capacity to meet surging inferencing demand. With the AI boom reshaping cloud adoption, Oracle’s growth could signal a broader tech rally, but also raises questions about sustainability, capacity, and competition in the high-stakes AI infrastructure race.
Why are Oracle shares rising so sharply?
The surge comes after Oracle reported an “astonishing quarter,” driven by four multibillion-dollar contracts signed with AI giants like OpenAI, Meta, and xAI. The company’s remaining performance obligations (RPO) — the best measure of locked-in future revenue — jumped 359% to $455 billion in the quarter ending August 31, far surpassing analyst estimates.Oracle now forecasts its cloud infrastructure revenue to grow 77% this fiscal year to $18 billion, with the business expected to expand to $144 billion over the next four years. That’s nearly 60% above Wall Street expectations and puts Oracle’s growth trajectory closer to Amazon Web Services, which posted $107 billion in revenue last year.
How is Oracle positioning itself in the AI race?
Oracle was late to cloud computing compared with rivals, but its low-cost, efficiency-driven infrastructure has become a magnet for AI firms needing vast computing power. In July, OpenAI signed a $30 billion annual contract, leasing 4.5 gigawatts of capacity from Oracle — a deal that will require multiple new U.S. data centers.Beyond OpenAI, Oracle has cut deals with Amazon, Alphabet, and Microsoft to run Oracle Cloud Infrastructure inside their platforms, with revenue from these partnerships up an eye-popping 1,529% in Q1.
Morningstar analysts noted Oracle’s participation in Stargate, the $500 billion AI supercomputer project backed by SoftBank and OpenAI, cements its role in both AI training and inferencing workloads — the latter widely expected to eclipse the training market in scale.
What does this mean for Oracle’s stock and investors?
Oracle’s premarket surge lifts its stock price to $312.65, up 45% year-to-date, far outpacing the broader market. The stock now trades at 33.34 times forward earnings, slightly richer than Amazon (32.34) and Microsoft (30.83).That premium reflects investor confidence that Oracle’s capital-light model — spending less on real estate and maximizing hardware efficiency — can deliver faster growth with lower investment compared to rivals. The company raised its annual capex forecast by $10 billion to $35 billion, still well below the hundreds of billions peers are deploying for AI data centers.
If sustained, the surge would not only reprice Oracle’s role in the cloud economy but also reshape the wealth rankings at the top: Ellison’s fortune, tied to his 41% ownership stake, could soon challenge Musk’s.
How are rivals and chipmakers reacting?
The ripple effects of Oracle’s results spread quickly across Wall Street. Shares of AMD rose 3.2%, Nvidia gained 1.96%, and Broadcom added 2.28% in premarket trading, reflecting optimism that AI-driven demand for chips and cloud infrastructure remains in its early innings.Meanwhile, rival cloud leaders Amazon, Microsoft, Alphabet, and Meta are expected to spend over $350 billion on AI-related infrastructure this year, with that figure topping $400 billion by 2026, according to industry forecasts.
Oracle’s rapid growth has raised questions about whether it can secure enough chips and infrastructure capacity to keep up with contracts, especially as competitors also face supply constraints.
Can Oracle sustain this momentum?
Oracle’s meteoric rise highlights a structural shift: AI is no longer just a tech trend, it’s reshaping the cloud economy itself. The company’s forecast suggests demand for inferencing — running AI models after training — is already outstripping training capacity, pointing to years of sustained growth.FAQs:
Q1: Why did Oracle shares jump 31% premarket today?Oracle shares surged due to a forecast of $500B AI cloud revenue and multibillion-dollar deals with OpenAI, Meta, and Nvidia, signaling massive growth in Oracle Cloud Infrastructure.
Q2: How is Oracle’s AI cloud surge affecting other tech stocks?
The premarket rally boosted peers: AMD +3.2%, Nvidia +1.96%, Broadcom +2.28%, reflecting heightened investor confidence in AI infrastructure and enterprise cloud demand.
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