Oracle’s stock skyrocketed roughly 35% on Wednesday, fueled by a surge in demand for its cloud services from AI companies, highlighting its intensified focus on powering artificial intelligence systems.
This growth in Oracle’s cloud division signifies a broader industry trend, with firms like OpenAI and xAI investing heavily to secure massive computing resources essential for leading the AI race, spending billions annually.
The stock climbed 34.7%, reaching an all-time high of $325.90 during early trading, marking its largest single-day increase since 1992.
If these gains persist, the company’s market valuation could rise by approximately $237 billion, bringing its total worth close to $915 billion and nearing the prestigious $1 trillion club.
Oracle’s stock has surged 45% this year, outperforming the ‘Magnificent Seven’ and the broader S&P 500 index, with investors placing big bets on AI-focused cloud companies. This boost also positively impacted shares of Nvidia, Broadcom, and Advanced Micro Devices, which climbed between 2.8% and 4.6% early on.
Competitor CoreWeave saw its shares increase by 17%.
In the August quarter, Oracle secured four multi-billion-dollar contracts with three clients, showcasing strong demand for its cloud offerings.
“In the coming months, we anticipate signing several more multi-billion-dollar clients, with RPO likely surpassing half-a-trillion dollars,” stated CEO Safra Catz.
Despite this, Microsoft, Amazon Web Services, and Google Cloud remain the dominant players in the cloud market, collectively holding a 65% share, while Oracle, Alibaba, CoreWeave, and others have smaller market portions.
The company has partnered with Amazon, Alphabet, and Microsoft to allow their cloud clients to use Oracle Cloud Infrastructure (OCI) alongside native services. Revenue from these collaborations increased over sixteen-fold in the first quarter.
“This figure now includes contributions from the Stargate venture and two other major AI players, indicating revenues beyond 2026 will significantly rise,” noted Ben Reitzes, analyst at Melius Research.
Analysts also highlighted Oracle’s involvement in SoftBank and OpenAI’s Stargate project as another advantage, providing the company a stake in a large-scale AI infrastructure initiative projected to channel around $500 billion in spending.
Oracle is also supplying cloud services to xAI, Elon Musk’s AI startup. Musk, the world’s richest individual and a long-time ally of Oracle’s chairman Larry Ellison, sees Ellison rapidly closing in on him in the wealth race, according to Forbes.
Oracle’s stock is trading at over 33.34 times its 12-month forward earnings estimates, compared to Amazon’s 32.34 and Microsoft’s 30.83.
