Can Oracle Stock Make a Trillion-Dollar Comeback?

In no other industry could a company with a valuation of over $500 billion be called as lethargic. Since September, Oracle has seen a noticeable shift in its stock prices and the debate over the company’s valuation continues among investors, but AI developers are getting ready to rent its servers.

The issue is not whether Oracle is still in the game or not, but whether this infrastructure giant can again assert its power to join the highly exclusive club with a $1 trillion market cap.

Oracle’s Decline from the Verge of Trillion-Dollar Status

Earlier this year, Oracle seemed on the path to a record-high market capitalization that would bring it amongst Nvidia, Alphabet, and Amazon when it reached a value of nearly $940 billion. However, this optimism has since faded.

The stock has dropped drastically by 41%, which resulted in a decline in Oracle’s valuation to about $550 billion, although the demand for the AI infrastructure continues to grow.

The pullback is a sign of the investor nervousness, rather than falling fundamentals. Factors such as debt, dependence on a few large customers, and the speed of data center expansion have overshadowed what is arguably one of the most powerful growth stories in enterprise AI infrastructure.

Silent Powerhouse in AI Infrastructure

The market volatility has not affected Oracle’s strategy to position itself as the backbone of the AI economy. The majority of the advanced AI models are trained in large data centers where the latest GPUs from Nvidia and AMD are located, and only a handful of companies have the resources to create such facilities.

This situation has effectively turned Oracle into a resource for the most aggressive AI players. Oracle’s exclusive RDMA networking technology gives it an advantage by transferring data more quickly than regular networks, and reducing costs for customers who pay by the minute.

The company’s capacity to create clusters with more than 131,000 GPUs positions it as one of the top global cloud infrastructure providers. With 147 data center regions running and a large number of other regions planned, Oracle is aggressively expanding its cloud base to accommodate the demand coming from powerful customers like OpenAI, Meta, and xAI.

Cloud Demand Is Outpacing Supply

Oracle’s total revenue for its fiscal 2026 second quarter increased by a decent 14% compared to the previous year. The cloud infrastructure business painted a much louder picture with its growth of 66%, reaching an all-time high of $4.1 billion, which proves how critical AI workloads have become to Oracle’s growth narrative.

The demand is so enormous that Oracle is just not able to keep up with the construction pace. The performance obligations that are still left to be performed grew to $523 billion, which indicates a huge crisis of unfulfilled contracts. Nevertheless, this number has a warning attached to it.

It is estimated that about $300 billion of the unfulfilled contracts are related to OpenAI, which raises the issue of concentration risk and whether all of that demand can actually be realized revenue. These uncertainties, along with Oracle’s $108 billion debt, have made investors very cautious.

What It Would Take to Reach $1 Trillion Again?

Even after the sharp decline in stock price, Oracle is not a cheap investment by any means. With a GAAP P/E ratio of about 36, the stock still offers a premium over the Nasdaq-100. For Oracle to rise from its current valuation of $550 billion back to $1 trillion, its stock price will have to increase by more than 80%, which will require almost a doubling of earnings, unless the multiples of valuation expand.

Such a situation might not be impossible considering the rapid growth of AI, but along with this patience is very much required. Although Oracle’s path is looking great, the likes of Walmart and JPMorgan Chase are very much closer to the trillion-dollar mark. It might not be the case that Oracle will be the next company to cross the $1 trillion limit, but dismissing it would be a huge mistake.