Oracle’s shares have surged, adding to the company’s record-breaking performance in the previous session and driving gains across the tech sector. A recent Reuters report noted that Oracle is nearing the trillion-dollar club, fueled by significant growth in its AI cloud business. The enterprise software maker’s remarkable rise can be attributed to a series of multi-billion-dollar cloud deals, highlighting the intense competition for computing power among companies investing heavily in artificial intelligence.
The scramble for computing power is driven by companies seeking to establish themselves as leaders in the AI race. Oracle’s stock gains have also brought attention to the company’s co-founder, Larry Ellison, who is now on track to surpass Elon Musk as the world’s richest person. According to The Wall Street Journal, OpenAI has signed a $300 billion deal with Oracle for computing power, one of the largest in history, which is likely to account for a substantial portion of Oracle’s newly outlined revenue.
As of the last close, Oracle’s market capitalization reached a record $933 billion, with the company’s shares rising 2% in premarket trading after climbing as much as 35.9% on Wednesday. Ellison’s net worth increased by nearly $100 billion to $392.6 billion, primarily driven by his 41% stake in Oracle. This puts him close to surpassing Tesla CEO Musk’s $439.9 billion fortune, which currently tops Forbes’ global wealth rankings.
The impact of Oracle’s gains is also being felt across the tech sector, with shares of Nvidia and Broadcom, which supply semiconductors used in data centers, experiencing marginal gains. Asian peers have also seen significant increases. Oracle’s shares are trading at a premium compared to its cloud services peers, with a 12-month forward price-to-earnings multiple of 45.3, compared to Amazon’s 31.3 and Microsoft’s 31.
The surge in Oracle’s shares and the company’s nearing of the trillion-dollar club underscore the growing importance of artificial intelligence and cloud computing in the tech industry. As companies continue to invest heavily in these areas, the competition for computing power and market share is likely to intensify. With Oracle’s market capitalization reaching new heights, the company’s future performance will be closely watched by investors and industry analysts alike.
