• Oracle’s stock surged over 36% in a single day, its biggest jump since 1992, after a blockbuster earnings report highlighted explosive demand for its AI-driven cloud services, adding more than $250 billion to Oracle’s market value startupnews.fyi. This one-day rally briefly propelled co-founder Larry Ellison past Elon Musk as the world’s richest person startupnews.fyi.
• The catalyst was a massive jump in Oracle’s cloud contract backlog. Oracle revealed its remaining performance obligations (future cloud revenue under contract) hit $455 billion, soaring 359% year-over-year calcalistech.com. CEO Safra Catz said Oracle has signed deals with the “who’s who of AI” – including OpenAI, Meta, Elon Musk’s xAI, NVIDIA, and AMD – positioning Oracle as a key infrastructure provider in the AI boom calcalistech.com.
• Among these contracts is a record-breaking deal with OpenAI. The Wall Street Journal reported OpenAI signed a $300 billion, five-year cloud agreement with Oracle to secure computing power reuters.com. This single deal likely accounts for a huge portion of Oracle’s new backlog and underscores Oracle’s emerging role as an essential player in the AI race reuters.com.
• Oracle’s leadership raised its outlook and investment to capitalize on the AI surge. Catz forecasts Oracle’s cloud infrastructure revenue will grow from about $18 billion this year to $114–144 billion within four years datacenterdynamics.com startupnews.fyi – nearly a tenfold jump – fueled by these AI deals. Oracle boosted its data center capital expenditures budget to $35 billion (up from $25B) to build out capacity with cutting-edge servers and AI chips startupnews.fyi.
• Wall Street analysts are stunned and bullish. Deutsche Bank’s Brad Zelnick called Oracle’s results “truly awesome,” and William Blair’s Sebastien Naji described the new backlog as “astonishing” startupnews.fyi. Jefferies analyst Brent Thill said Oracle’s performance “reinforces growing AI optimism” across the tech sector startupnews.fyi. Still, some caution that Oracle’s valuation – now 45× earnings, a premium to peers like Amazon – and execution risks warrant watching reuters.com hotcandlestick.com.

Oracle’s AI-Fueled Quarter Stuns Wall Street

Oracle’s latest earnings quarter shocked Wall Street and sent its stock soaring on an AI-fueled wave of optimism. Shares of Oracle jumped as much as 35–40% intraday and closed up about 36% on Wednesday, marking the company’s largest one-day gain in over three decades startupnews.fyi. This remarkable rally added roughly $250 billion to Oracle’s market capitalization and briefly vaulted Larry Ellison – who owns about 40% of Oracle – to the top of global wealth rankings startupnews.fyi. Ellison’s net worth climbed by nearly $100 billion in a day to around $393 billion, putting him neck-and-neck with (or even briefly ahead of) Tesla’s Elon Musk in some real-time wealth estimates reuters.com calcalistech.com.

The stock surge came despite Oracle missing Wall Street’s earnings and revenue expectations for the quarter startupnews.fyi. Instead, investors fixated on Oracle’s jaw-dropping cloud growth forecasts and deal pipelinetied to artificial intelligence. “Oracle lit a fire under the rekindled AI trade,” said Richard Hunter, head of markets at Interactive Investor, noting that the company’s billion-dollar cloud demand outlook triggered a “ripple effect” lifting AI-related stocks broadly reuters.com reuters.com. In other words, Oracle’s news not only boosted its own stock into record territory (near a ~$933 billion valuation) but also sparked rallies in chipmakers and tech peers that benefit from AI spending reuters.com.

What stunned analysts and investors was the scale of Oracle’s cloud backlog and bookings tied to AI. Oracle reported that its remaining performance obligations (RPO) – essentially the value of contracted future cloud services – had skyrocketed to $455 billion, up from about $100 billion a year ago calcalistech.com. This ~360% surge in backlog is virtually unprecedented for a company of Oracle’s size, and it signals multi-year commitments from customers for Oracle Cloud services. By comparison, Oracle’s total current annual revenue is under $50 billion, so a $455 billion backlog represents extraordinary demand ahead. As William Blair analyst Sebastien Naji put it, Oracle is “continu[ing] its shift to a meaningfully higher strata” of the tech industry by reinventing itself as an AI cloud heavyweight finance.yahoo.com. The backlog figure “astonished” many on Wall Street startupnews.fyi, and it solidified the view that Oracle has become a central player in the ongoing AI boom startupnews.fyi.

Cloud Backlog Swells with the ‘Who’s Who of AI’

Oracle’s executives attribute the explosive growth to a string of major cloud infrastructure deals with top AI companies. “We have signed significant cloud contracts with the who’s who of AI, including OpenAI, xAI, Meta, NVIDIA, AMD, and many others,” CEO Safra Catz told analysts calcalistech.com. In Oracle’s fiscal first quarter (the period reported), the company inked four multi-billion-dollar cloud contracts with just three customers datacenterdynamics.com – illustrating how a few massive clients can dramatically boost its business. One standout example: OpenAI, the maker of ChatGPT, agreed to a $30 billion-per-year cloud capacity deal with Oracle in July datacenterdynamics.com. According to The Wall Street Journal, this translates to roughly a $300 billion contract over five years – among the largest cloud deals in history reuters.com.

These contracts largely explain Oracle’s huge jump in RPO (backlog). In fact, Oracle disclosed it added about $317 billion in new cloud bookings in just the last quarter benzinga.com – a figure that dwarfs the cloud bookings of most rivals. The OpenAI deal alone requires building enormous computing infrastructure; it will reportedly consume 4.5 gigawatts of power capacity (equivalent to two Hoover Dams) to support OpenAI’s AI model training and deployment needs benzinga.com. OpenAI had previously relied exclusively on Microsoft’s Azure cloud, but faced GPU supply constraints. By diversifying to Oracle, OpenAI secures extra capacity to train advanced models and roll out new AI products benzinga.com.

Beyond OpenAI, Oracle has drawn other high-profile AI customers. Meta (Facebook’s parent) is using Oracle Cloud, as is xAI – Elon Musk’s new AI startup – and even major chipmakers like NVIDIA and AMD (perhaps for their own cloud-based AI research or internal needs) calcalistech.com. Oracle revealed that these AI clients drove a 57% year-over-year jump in usage of Oracle Cloud Infrastructure (OCI) in the quarter datacenterdynamics.com. Demand is so high that OCI consumption “continues to dramatically outstrip supply,” Catz said datacenterdynamics.com. In other words, Oracle’s challenge is supplying enough servers and data center capacity fast enough to meet its AI customers’ needs.

Notably, Oracle is also leveraging a unique multicloud strategy to win business. The company can deploy its hardware and cloud services inside other providers’ data centers (like Azure, AWS, or Google Cloud) and in customers’ own facilities, via its “Oracle Alloy” and “Dedicated Region” offerings. Catz reported this multicloud approach has seen explosive 1,529% growth and now extends Oracle’s cloud into 34 third-party data centers, with plans to launch in 37 more datacenterdynamics.com. By being flexible and “playing nice” with other clouds, Oracle has made itself an “indispensable part of the global AI supply chain,” rather than a siloed competitor startupnews.fyi calcalistech.com. This cooperative strategy helped Oracle snag deals that might have otherwise gone to the bigger cloud players.

Big Bets on AI Infrastructure and Future Plans

To capitalize on this momentum, Oracle is doubling down on AI infrastructure investment and laying out ambitious growth plans. The company raised its forecast for capital expenditures, now expecting to spend about $35 billion this fiscal year on data center expansion startupnews.fyi – a hefty sum aimed at building or leasing more server capacity filled with the latest AI chips (like NVIDIA’s H100 GPUs). Oracle plans to partner with data center builders such as Crusoe Energy to erect new cloud facilities across multiple U.S. states, including Wyoming, Texas, Michigan, Pennsylvania, and New Mexico benzinga.com. This rapid build-out is needed to deliver on contracts like OpenAI’s, and it also boosted shares of chip suppliers: NVIDIA’s stock jumped ~4% and AMD’s ~3.5% on Oracle’s news, reflecting expectations of large chip orders to equip Oracle’s expanding cloud startupnews.fyi.

Looking ahead, Oracle’s revenue projections underscore just how dramatic its AI-fueled transformation could be. Catz told investors that Oracle Cloud Infrastructure (OCI) revenue, roughly $10 billion last year, is on track to reach $18 billion in FY2026 (a 77% jump) and then surge to $32 billion, $73 billion, $114 billion, and $144 billion in the subsequent four fiscal years calcalistech.com datacenterdynamics.com. By about 2029, Oracle envisions its cloud business to be an order of magnitude larger, rivaling the current scale of Amazon Web Services or Microsoft Azure. Much of that growth is already baked in via the long-term contracts (the $455B RPO) Oracle has signed datacenterdynamics.com.

Oracle’s strategic emphasis is also evolving. While much attention is on AI training (the compute-intensive process of developing AI models, which Oracle’s cloud is now hosting), Ellison argues the bigger opportunity will be in AI inference – running AI models in production to serve real-time results. “It’s AI inferencing that will change everything,” Oracle’s CTO Larry Ellison said. He noted that Oracle is aggressively pursuing the inference market (not just training), and believes Oracle is well positioned to win there “because Oracle is by far the world’s largest custodian of high-value private enterprise data.” datacenterdynamics.com In other words, Oracle’s decades-long strength in enterprise databases gives it a treasure trove of corporate data and relationships needed for deploying AI in business applications. Industry observers have even called this secure, organized trove of enterprise data the “Holy Grail” for accurate AI inference – an asset Oracle uniquely holds versus rivals that rely on open internet data calcalistech.com. To leverage this advantage, Ellison highlighted Oracle’s launch of a new AI-augmented database offering that will allow AI models to be applied directly to data stored in Oracle databases datacenterdynamics.com. This could enable more intelligent, automated insights for enterprise customers, marrying Oracle’s traditional software products with cutting-edge AI.

All told, Oracle’s leadership is confident that the company’s big bet on AI will drive a new era of growth. In fact, Catz has stated that if Oracle continues on its current trajectory, reaching a $1 trillion market valuation is “inevitable” calcalistech.com. After this week’s surge, Oracle is already within striking distance of that milestone, nearing the club of tech giants like Apple, Microsoft, and Aramco that boast thirteen-figure market caps reuters.com. To achieve those lofty goals, Oracle will need to execute – building out capacity on time, and ensuring its key clients like OpenAI succeed and can afford these enormous contracts. (Notably, OpenAI’s own revenues are estimated around $1 billion today, far below the $60 billion per year it committed to Oracle, so that partnership’s viability assumes massive growth at OpenAI itselfin coming years benzinga.com.) Oracle also faces formidable competition in cloud computing from Amazon, Microsoft, and Google – all of whom are investing tens of billions in AI infrastructure as well. But Oracle is carving out a lucrative niche by offering tailored, high-performance cloud clusters for AI and by collaborating with customers across multi-cloud environments, rather than competing on price alone.

Wall Street Reacts: ‘Truly Awesome’ Results and Cautious Optimism

Market reaction to Oracle’s AI-powered rise has been enthusiastic. Many Wall Street analysts rushed to raise their price targets and ratings for Oracle after the earnings. JPMorgan’s Mark Murphy, for instance, hiked his target price, citing Oracle’s “meaningfully higher strata” of cloud growth finance.yahoo.com. Citi analysts upgraded Oracle to a Buy and set a street-high target around $410, while others like Stifel and Evercore lifted targets into the $300s hotcandlestick.com. The consensus emerging is that Oracle’s AI opportunity is real and material. “Oracle’s exceptional backlog confirms its role as a key AI enabler,” one analyst declared, according to Benzinga benzinga.com. Comparing Oracle’s surge to the leader in AI chips, one market observer quipped that Oracle “made itself look like the next NVIDIA” – a reference to NVIDIA’s stock quintupling over the past two years on AI enthusiasm benzinga.com.

Several analysts offered colorful accolades. Deutsche Bank’s Brad Zelnick bluntly described Oracle’s quarter as “truly awesome,” reinforcing Oracle’s position as a leader in the AI-driven cloud market startupnews.fyi. William Blair’s Sebastien Naji called Oracle’s $455 billion backlog “astonishing” and evidence of a transformative leap in scale startupnews.fyi. And Jefferies’ Brent Thill noted that Oracle’s success is “reinforcing [the] growing AI optimism” among tech investors broadly startupnews.fyi. Oracle’s management also received kudos for vision and execution. The company’s veteran leaders – Ellison (age 81) and Catz – were credited for decisively pivoting Oracle toward AI and cloud when few expected the legacy database vendor to become a trendsetter. “Oracle has become the go-to place for AI workloads,” Catz said on the investor call calcalistech.com – a statement that seemed bold, but is now backed by hard numbers.

The euphoria is not without some notes of caution, however. Oracle’s stock now trades around 45 times forward earnings, a rich valuation that assumes a lot of growth ahead reuters.com. (For comparison, Amazon and Microsoft trade near 30× earnings reuters.com.) Some analysts warned that such a rapid rise leaves little room for error – any slowdown in cloud growth or an issue with a big contract could jolt the stock. Additionally, Oracle’s operating margins have trended slightly lower due to heavy investment and the shift to cloud subscriptions hotcandlestick.com. The company’s plan to spend $35 billion (or more) on capex this year will likely require tapping debt markets, since Oracle carries more debt than cash (unlike cash-rich rivals) benzinga.com. And while Oracle’s backlog is enormous, it will take years to convert that into actual revenue; investors will be watching each quarter to ensure those AI customers ramp up as promised.

By and large, though, the sentiment is that Oracle has executed a remarkable turnaround in the eyes of the market. The nearly 50-year-old firm is now one of the 10 most valuable companies in the S&P 500 hotcandlestick.com, and it is increasingly mentioned in the same breath as the cloud hyperscalers it once lagged. “Oracle’s cloud and AI deals send its stock soaring,” wrote Sophie Shulman of CTech, noting that even a year ago many investors had a hard time believing Oracle could reinvent itself so dramatically calcalistech.com. Now, after this “truly awesome” quarter, Oracle’s transformation from a legacy software provider into a dominant AI cloud contender is hard to ignore.

Bottom line: Oracle has ridden the AI wave to new heights, leveraging its technology (OCI cloud and databases), strategic deals, and decades of enterprise experience. If the company can deliver on its bold forecasts – expanding capacity, onboarding AI customers, and enabling the next generation of AI applications – it may firmly establish itself as an indispensable backbone of the AI era. As Oracle’s CTO Larry Ellison put it, “AI will change everything.” And for Oracle’s shareholders, it already has calcalistech.com.

Sources: Oracle earnings call and analyst commentary calcalistech.com startupnews.fyi; Reuters, Yahoo Finance, and Benzinga news reports reuters.com startupnews.fyi benzinga.com; DataCenterDynamics analysis datacenterdynamics.com datacenterdynamics.com; Wall Street Journal via Reuters reuters.com.