Oracle Rides AI Wave to the Top — But Can the Rally Hold?
Artificial intelligence has once again electrified Wall Street. On September 10, Oracle shares surged 36% in a single day—adding a staggering $244 billion to its market cap—after the company positioned itself as a key player in AI infrastructure. But the momentum didn’t last: the stock quickly gave back some gains, prompting fresh concerns about the durability of the broader tech rally.
Underwhelming Results, Overwhelming Potential
Oracle’s latest earnings report missed expectations on both revenue and profit. Still, investors zeroed in on the company’s bullish guidance for growth in cloud computing and AI services.
The standout figure: Oracle’s Remaining Performance Obligations (RPO)—the value of signed contracts yet to be fulfilled—hit $455 billion, up 359% year-over-year. Major deals with OpenAI, Meta, and Nvidia helped fuel that growth.
“It was a stunning quarter,” said CEO Safra Catz. “Demand for Oracle Cloud Infrastructure continues to grow. RPO could soon exceed half a trillion dollars.”
A Late Entry Becomes a Strategic Edge
Despite being late to the cloud game, Oracle is now reaping the benefits of a leaner, more modern architecture. The company forecasts its cloud infrastructure revenue will grow from $18 billion this year to $144 billion by 2029.
The surge in AI optimism is lifting the entire sector. On the same day Oracle rallied, Nvidia rose 3.8%, Broadcom 10%, and AMD 2.4%. Amazon and Apple, seen as trailing in AI, dropped 3.3% and 3.2% respectively.
Oracle’s niche? It’s focused exclusively on enterprise infrastructure—not consumer tech like many of its Big Tech peers.
Ellison Briefly Challenges Musk for the Richest Spot
The stock spike added nearly $90 billion to co-founder Larry Ellison’s net worth in a single day—temporarily placing him just $1 billion behind Elon Musk in the Bloomberg Billionaires Index. But as Oracle shares pulled back, Musk regained his lead. As of September 12, Musk was worth $419 billion to Ellison’s $349 billion.
Wall Street Analysts Stay Bullish
Despite the recent volatility, analyst sentiment remains strong. BNP Paribas Exane raised its price target on Oracle to $377. TD Cowen followed with a $375 target and a “Buy” rating. Piper Sandler set its target at $330 and named Oracle the new leader in AI infrastructure. BMO Capital remains slightly more cautious, targeting $345.
Bubble Watch: Echoes of the Dot-Com Era?
Since April, the S&P 500 has jumped from roughly 5,000 to nearly 6,600 points—driven largely by AI hype. While some analysts believe real gains will come as AI spreads into non-tech industries, others see worrying signs of speculative excess.
Simply mentioning “AI” in filings has been enough for some companies to enjoy double-digit stock gains—reminiscent of the dot-com bubble when firms soared just by saying they were "going online."
Caution Flags from Market Veterans
Investor Leon Cooperman has warned of serious overvaluation. “Only 2% of the time in history have stocks been this expensive,” he told CNBC. He also questioned whether AI is as transformative—or profitable—as many believe.
Cooperman pointed to bigger risks too: rising U.S. debt, gridlock in Washington, and signs of economic slowdown.
RBC Capital Markets echoed the warning, noting a decline in investor inflows to U.S. equity funds. Lori Calvasina, RBC’s head of U.S. equity strategy, cited “buyer fatigue” and warned that lofty valuations could scare off new capital.