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Oracle‘s shares rose on Thursday, extending a record run from the previous session and boosting stocks across the tech sector, as the company moves closer to the trillion-dollar club on soaring gains from its AI cloud business.
The enterprise software maker’s remarkable rise, fuelled by a wave of multi-billion-dollar cloud deals, highlights the scramble for computing power as companies pour billions into becoming leaders in the AI race.
The stock’s gains also position Oracle co-founder Larry Ellison on track to surpass Elon Musk, currently the world’s richest man.
“Oracle lit a fire under the rekindled AI trade,” said Richard Hunter, head of markets at Interactive Investor, noting that the company’s multi-billion-dollar demand outlook has triggered a “ripple effect” for AI-related stocks.
OpenAI signs deal with Oracle
The Wall Street Journal reported on Wednesday that OpenAI has signed a $300bn deal with Oracle for computing power, one of the largest contracts in history, likely accounting for the bulk of the new revenue Oracle outlined on Tuesday.
Oracle’s shares were last up 1.5 per cent in premarket trading after climbing as much as 35.9 per cent on Wednesday, lifting the company’s market valuation to a record $933bn at the last close.
The stock has nearly doubled in value this year, making it one of the top performers in the S&P 500 and outpacing gains by the so-called Magnificent Seven stocks.
Co-founder Ellison saw his net worth rise by nearly $100bn to $392.6bn, largely due to his 41 per cent stake in Oracle, compared with Tesla CEO Elon Musk’s $439.9bn fortune, which still tops Forbes’ global wealth rankings.
Oracle’s shares are trading 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, versus Amazon’s 31.3 and Microsoft’s 31.
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