Oracle (NYSE: ORCL) stock soared by 40% in Wednesday’s trading session, putting the company on course for its best day since 1992.
It’s not quite the 5,700% that the Dan Ives–backed Eightco Holdings (NASDAQ: OCTO) surged by this week, but this is a big deal for a large-cap like Oracle.
How big? Well, the rally added almost $278 billion in market value, pushing the enterprise software giant toward the $1 trillion club alongside Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA).
And for co-founder Larry Ellison, the surge boosted his net worth by more than $100 billion in a single day, putting him at, or even slightly ahead of, Elon Musk as the world’s richest man.
The broader market also reflected the artificial intelligence-driven optimism, with the S&P 500 hitting yet another record high.
AI Deals Drive Oracle’s Historic Surge
So what is driving the euphoria over Oracle? It wasn’t the company’s Q1 FY 2026 earnings, reported yesterday after market close. Oracle posted $14.9 billion in revenue, up 12% year over year, and an EPS of $1.47 — both just shy of analyst estimates.
But what stunned the Street was the promise of future growth in AI. Oracle CEO Safra Catz said the company’s Remaining Performance Obligations (RPO) — a measure of contracted future revenue — surged 359% from last year to a record $455 billion, and it expects that figure to top $500 billion in the coming months.
Oracle also disclosed that it had signed four multi-billion-dollar AI contracts with major players, including OpenAI, xAI, and Meta (NASDAQ: META), cementing its role as a critical provider of computing power for the next wave of AI.
On top of that, management raised its forecast for Oracle Cloud Infrastructure (OCI) to $18 billion in fiscal 2026 revenue, representing 77% growth, and said the business could scale to $144 billion within four years.
The company highlighted explosive demand for its MultiCloud services, where Oracle hardware runs inside partner data centers at Amazon, Google, and Microsoft. Revenue in that segment jumped an eye-popping 1,529% in the quarter, and Oracle said it will add 37 new data centers worldwide to meet the surge in demand
Oracle’s AI Bet: Growth at a Price
Oracle’s growth story comes with a big trade-off: soaring capital costs and thinner margins. Building dozens of new data centers and buying fleets of Nvidia GPUs will weigh on profitability, even as revenue projections climb. Oracle’s capital spending has soared, driving free cash flow into negative territory.
Acting as overflow capacity for hyperscalers like Amazon, Microsoft, and Google also means winning business at lower margins than Oracle’s traditional software licensing.
The company has also become a stand-in for global AI demand, with a backlog of $455 billion, potentially topping $500 billion soon — underscoring just how much computing power the industry is still chasing.
Still, the risk is clear: Oracle is betting heavily that today’s AI boom will endure. If demand holds, the company could lock in a long runway of growth. If it turns out to be a bubble, those massive capital expenditures could leave Oracle — and other tech giants — exposed.
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