Just two years ago, Oracle (NYSE: ORCL) stock was trading for just $64 per share. Today it’s going for $166.
Just this year, Oracle is up 60%.
Those kinds of gains would be impressive for a small company making the jump. But for a blue blood like Oracle, they’re downright astonishing.
The latest leg up came last week when the company announced strong earnings and an unlikely partnership with none other than Amazon. The two behemoths have been locked in a competition over cloud services for more than a decade. But apparently they’ve decided to move past it.
The new partnership will allow customers to access Oracle Autonomous Database and Oracle Exadata Database Service through the Amazon Web Services platform, making it easier for customers to integrate data and manage databases.
That news was enough to send Oracle stock 13% higher in a single day. On top of that, it ended the week with a single-day 7.5% gain when the company said annual revenue would rise to at least $104 billion in fiscal 2029 thanks to its cloud infrastructure business.
Oracle also raised its sales outlook for fiscal 2026 to at least $66 billion from the previous target of $65 billion.
The capitulation from Amazon and the sharp rise in share price goes back to Oracle’s ability to handle generative AI workloads.
Oracle has been building out cloud data centers with Nvidia GPUs and collecting billions of dollars in business from AI companies that need its processing power.
Oracle signed $3 billion of cloud GPU contracts in its fiscal first quarter, which ended last month. That drove a 45% increase in overall cloud revenue, totaling $2.2 billion.
That means cloud computing accounted for virtually all of Oracle’s growth this past quarter — even though it still only makes up only 17% of the company’s total revenue. So you can see where lofty growth expectations are coming from.
Microsoft has been an especially important partner, since both the Bing search engine and OpenAI have shifted portions of their AI workloads onto Oracle’s cloud.
Meanwhile, Chairman and CTO Larry Ellison is predicting that training the most advanced AI models will cost $100 billion apiece going forward. Hence his optimistic five-year revenue forecast.
“I will say that demand is still outstripping supply,” CEO Safra Catz said on the company’s earnings call. “But I can live with that.”
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Oracle’s total revenue rose 8%, to $13.31 billion from $12.45 billion a year ago. And net income jumped 21%, to $2.93 billion ($1.03 per share) from $2.42 billion ($0.86 per share).
For the current quarter, Oracle expects revenue to grow 8%–10%, with adjusted EPS of $1.45–$1.49.
And get this…
Powering massive data centers like the ones Oracle relies on has become a huge problem. However, Oracle is circumventing that by designing a data center that will use over a gigawatt of power — and it will be powered entirely by modular nuclear reactors.
Small modular reactors (SMRs) can be mass-produced in a factory and transported in a truck. They’re also safer than sprawling nuclear plants. But most importantly, they come at a fraction of the cost.
That is, the latest conventional reactor in the U.S. cost $35 billion, but SMRs can be built for as little as $60 million a piece.
So, rather than build expensive nuclear power plants, which have a massive physical footprint and NIMBY (not in my backyard) stigma, power consumers — especially wealthy tech companies like Oracle — can build their own mini-nuclear plant right on-site.
That’s why the best way to play this trend isn’t necessarily by investing in Oracle. Or IBM, Microsoft, Amazon, or any other big-name tech player.
It’s to invest in the company that’s positioned to power their next-gen data centers. And you can find out exactly how to do that right here.
Fight on,
Jason Simpkins
Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more...
In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor's page.
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