AI computing power demand explodes! Oracle's $500 billion cloud order ignites stock price to new highs, moving towards the Top 10 market capitalization in the U.S. stock market

According to Zhitong Finance APP, Oracle (ORCL.US) saw a significant increase in its first fiscal quarter business bookings and raised its revenue guidance for cloud infrastructure, leading to a substantial rise in its stock price. As of the time of publication, Oracle's stock surged 28% in after-hours trading following the latest quarterly earnings release. If this stock performance continues in Wednesday's trading, it will set a historical high and mark the largest single-day increase for Oracle since 1999. On this basis, Oracle is expected to add approximately $190 billion in market value, which will push the company's market capitalization above $800 billion.

Based on Tuesday's closing price, this increase in market value will allow Oracle to surpass JP Morgan (JPM.US), Walmart (WMT.US), Eli Lilly (LLY.US), and Visa (V.US), becoming the tenth largest company by market capitalization in the S&P 500 index, with a market value of approximately $870 billion. The single-day increase exceeds the total market capitalization of Intuit (INTU.US) and Booking Holdings (BKNG.US). As of Tuesday's close, Oracle's stock has risen 45% this year, four times the increase of the S&P 500 index.

As a well-known database software vendor, Oracle has recently achieved success in the highly competitive cloud computing market. Earlier this summer, the company signed an unprecedented agreement with OpenAI, securing 4.5 GW of data center capacity—enough energy to meet the electricity needs of millions of American households. The company's major cloud customers also include TikTok, a subsidiary of ByteDance, and Nvidia (NVDA.US).

Larry Ellison, Oracle's co-founder, chairman, and chief technology officer, stated in a press release that the company will launch an Oracle AI database service in October, allowing AI models from OpenAI and other companies to run on customer data stored in Oracle databases. This move will deepen Oracle's product integration with OpenAI. In August, Oracle announced that it had integrated OpenAI's new GPT-5 AI model into its cloud applications.

In a statement released on Tuesday, Oracle stated that such transactions help elevate the remaining performance obligations (a measure of bookings) to $455 billion as of the end of the first fiscal quarter, more than four times the figure from the same period last year.

Oracle's CEO Safra Catz stated in the announcement that recent and upcoming bookings will drive rapid expansion of the cloud infrastructure business in the coming years. She noted that this department is expected to grow by 77% this fiscal year, reaching $18 billion, and will continue to maintain strong growth, with annual revenue projected to reach $144 billion by the fiscal year ending in May 2030. This expectation exceeds Wall Street's expectations. More specifically, the company expects cloud infrastructure revenue to reach $32 billion, $73 billion, $114 billion, and $144 billion over the next four years.

Catz stated that this is an amazing quarter, and the demand for Oracle's cloud infrastructure continues to grow. The company signed four contracts worth billions of dollars with three different customers during the quarter, and she added that more partnerships are expected to be reached with additional customers in the coming months, bringing the remaining performance obligation amount to over $500 billion.

eMarketer analyst Jacob Bourne stated, "Companies are clearly eager for cost-effective AI cloud tools, and Oracle is committed to meeting this demand."

Although Oracle reported its fiscal Q1 2026 results below Wall Street's expectations, its cloud business, which is the focus of the market, still exceeded expectations. First-quarter revenue was $14.9 billion, slightly below the $15 billion expected by analysts surveyed by Bloomberg. The software giant's adjusted earnings per share were $1.47, also below the expected $1.48. Revenue from the cloud infrastructure business grew by 55% to $3.3 billion, while analysts had previously expected a growth rate of 53%.

Investors are eager to learn more about Oracle's long-term profitability in providing cloud infrastructure services for AI clients. Wall Street expects that due to the extremely high costs of building data centers, the company's free cash flow will be negative for the next two years.

Oracle has been heavily purchasing NVIDIA's highly sought-after graphics processing units (GPUs) and renting out this computing power through its OCI business to competitors like Amazon (AMZN.US) and Google (GOOGL.US). Revenue from these customers grew by 1529% in the first quarter.

Ellison stated, "We expect that as we deliver 37 more data centers to three hyperscale partners, bringing the total number of data centers to 71, MultiCloud revenue will significantly increase each quarter in the coming years."

Melissa Otto, head of Visible Alpha research at S&P Global, stated, "By providing integrated solutions across multiple environments, Oracle not only maintains its leadership in cloud computing but is actually leading the development of cloud computing." "This may attract more companies seeking multifunctional cloud computing solutions."

As a result, this software giant has invested billions of dollars to advance its artificial intelligence plans and build data center infrastructure. Catz stated during a call with analysts on Tuesday that this year's capital expenditure is approximately $35 billion. This spending level is much higher than Wall Street's expectation of $26 billion. Catz mentioned that the company is further applying artificial intelligence technology internally, which is expected to help improve operational revenue. In recent months, Oracle has laid off hundreds of employees and is reportedly discussing the cancellation of cash raises and bonuses for employees this year.

Catz stated during the earnings call, "We enable customers to easily connect all databases directly to the world's most advanced AI inference models—ChatGPT, Gemini, Grok, all of which are unique to Oracle Cloud."

Rebecca Wettemann, CEO of industry analysis firm Valoir, stated that although Oracle is smaller in scale, "current data and forecasts indicate that as large organizations seek to support their AI plans through Oracle Cloud, Oracle's investments in infrastructure are continuing to pay off."