Oracle’s AI Bet Drives Stock Rally
Oracle’s stock price has soared in 2025, nearly doubling thanks to enthusiasm around a $300 billion cloud partnership with OpenAI. While quarterly results disappointed — Q1 FY26 posted $14.9 billion revenue and $1.47 EPS — investors were reassured by projections of $18 billion in infrastructure revenue for FY26 and $144 billion by FY30.

Safra Catz highlighted large contract wins and a record $455 billion backlog, more than tripling year-over-year. Oracle’s client roster now includes OpenAI, Meta, and xAI, supported by its strength in AI inference and proprietary database technology.

Risks remain significant: capital outlays of $35 billion this year, stiff competition from hyperscale rivals, and economic pressures that could curb enterprise AI demand. Research from MIT shows many companies still struggle to see ROI from AI, raising questions about sustainability.

Analysts are mostly bullish, with some describing Oracle’s results as a “seismic shift,” though caution persists about reliance on outsourced demand. TipRanks pegs the stock’s fair value at $263.93, well under current trading levels.