Oracle moved closer to a $1 trillion valuation after a record jump tied to its AI cloud business. The stock slipped on Thursday, but only after a huge surge the day before.
According to Reuters, the company’s rally follows a wave of multi-billion-dollar cloud deals. Demand for computing power has intensified as firms race to lead in AI.
Stock momentum and rich valuation
Oracle shares fell 2.2% in early trading after rising as much as 35.9% on Wednesday. Its market value reached a record $933 billion at the last close.
The stock has nearly doubled this year. It now ranks among the top performers in the S&P 500 index, outpacing gains by the so-called Magnificent Seven.
Oracle trades at a premium to cloud peers. Its 12-month forward price-to-earnings multiple is 45.3, compared to Amazon’s 31.3 and Microsoft’s 31.
Ellison’s wealth rises with Oracle
Co-founder Larry Ellison’s net worth rose by nearly $100 billion to $392.6 billion. His 41% stake in Oracle drove the jump. Tesla CEO Elon Musk still leads Forbes’ global wealth list at $439.9 billion.
AI cloud demand and major deals
Analysts pointed to Oracle’s AI cloud demand outlook as a key driver. “Oracle lit a fire under the rekindled AI trade,” said Richard Hunter of Interactive Investor. He added that it set off a ripple effect in AI-related stocks.
The Wall Street Journal reported that OpenAI has signed a $300 billion computing deal with Oracle. Reuters said the deal is among the biggest in history. It likely accounts for much of the new revenue Oracle outlined on Tuesday.
The momentum highlights the larger scramble for AI infrastructure. Companies are spending billions to secure computing power for training and inference workloads.
Oracle’s latest moves also show the shift in cloud competition. Investors are watching if the company can sustain its growth pace and high multiple.
Reporting credits in the Reuters story go to Joel Jose and Akash Sriram, with editing by Arpan Varghese and Shinjini Ganguli.
