Oracle shares jumped about 24% this week, marking its strongest performance since April 2001. The share surge was a result of the positive reactions from investors to its strong earnings and positive outlook for its cloud business. According to a report by CNBC, nearly all its gains came from two trading days following the release of its quarterly results.
The last time the company saw a comparable weekly spike was during the dot-com crash in April 2001, when any rebound was short-lived. In contrast, Oracle had seen its share price plunge by almost 50% in the previous quarter. The company is no longer behind cloud computing, having found its niche, and is attracting users who want to run AI workloads on its systems.
“Oracle is in the enviable position of having more demand than it can fulfill” noted Joseph Bonner, an analyst at Argus Research, in a client bulletin on Friday. He advised investors to buy the stock and boosted his 12-month price target from $200 to $235. On Friday, Oracle shares closed at a high of $215.22. In its earnings announcement late Wednesday, Oracle reported revenue and profit that beat analysts’ expectations. CEO Safra Catz projected that fiscal-year sales would top $67 billion, above the $65.18 billion consensus forecast from LSEG.
Oracle continues to race to catch up with Amazon, Google
“The demand is astronomical,” said Chairman Larry Ellison during the earnings call. “But we have to do this methodically. The reason demand continues to outstrip supply is we can only build these data centers, build these computers, so fast.” In the fiscal year ending May 31, the company’s capital spending was over $21 billion, greater than its total investment from 2019 to 2024. Catz told investors that spending should climb to $25 billion in fiscal year 2026. By comparison, Google plans about $75 billion in capital outlays this year, and Microsoft aims for $80 billion.
Oracle’s major cloud customers now include major AI firms like Meta, OpenAI, and Elon Musk’s xAI, all of which rely on Nvidia’s graphics processors to train their AI models that can produce texts, images, and even video from simple text commands. This week, Oracle also added startups Baseten, Physical Intelligence, and Vast Data to its cloud lineup. “We will build and operate more cloud infrastructure data centers than all of our cloud infrastructure competitors combined,” Ellison added. In 2025, Oracle shares have risen about 29%.