How Oracle’s Massive AI Forecast Sent Shares Soaring

Oracle’s shares jumped by as much as 43 percent in a single trading session, marking its biggest one-day gain since 1992. The surge pushed the stock to a record high. The rally drew significant attention because it came in response to an aggressive forecast tied to Oracle’s AI-focused cloud business.

The surge also lifted Oracle’s market valuation close to $913 billion, bringing the company nearer to joining the trillion-dollar club and boosting co-founder Larry Ellison’s net worth substantially.

Investors interpreted the move not simply as a speculative spike but as validation of Oracle’s ambitions to become a serious player in AI infrastructure. Momentum in AI and cloud stocks added to the positive sentiment across the sector.

The Forecast & Business Drivers

Oracle disclosed that it secured four multi-billion dollar contracts in the most recent quarter, pushing its backlog of future performance obligations (RPO) to $455 billion, more than quadruple its level a year ago.

The company forecasted that revenue from Oracle Cloud Infrastructure (OCI) would rise 77 percent to $18 billion in the current fiscal year, with further projections scaling to $144 billion by 2030.

Much of that projected growth is anchored by the deal with OpenAI, which reportedly will purchase $300 billion in computing power over five years from Oracle.

Beyond that, Oracle plans to expand its datacenter footprint by adding 37 new facilities, bringing its total to 71, especially to support hyperscaler and multi-cloud use cases.

On the hardware side, Oracle struck a deal to deploy 50,000 MI450 AI chips from AMD beginning in 2026, integrating compute capacity directly under its control.

These drivers, large contracts, strong backlog, infrastructure expansion, and control over compute hardware, form the foundation for Oracle’s bullish forecasts.

Strategic AI Positioning & Competitive Landscape

Oracle is shifting its image from a software legacy firm to a contender in AI infrastructure. It hopes to merge its data management expertise with scaling compute capacity to host large AI models and win enterprise workloads.

Its backlog of $455 billion is reportedly about four times the size of Google’s backlog in that space, which many analysts view as a sign that Oracle’s AI growth rate could outpace some incumbents.

Partnerships elevate Oracle’s positioning. The AMD agreement to deploy MI450 chips gives Oracle greater control over its AI compute.

Oracle already utilizes Nvidia GPUs in its cloud infrastructure, helping it attract AI workloads that depend on high-performance accelerators.

Oracle also is a participant in the Stargate initiative, a joint venture between OpenAI, SoftBank, and Oracle that aims to invest up to $500 billion in AI data center infrastructure over coming years.

In a sense, Oracle is not just supplying infrastructure but helping design large-scale AI ecosystems.

Despite those ambitions, Oracle faces steep competition from AWS, Azure, and Google Cloud, each of which commands scale, mature operations, and entrenched enterprise relationships. Oracle must demonstrate execution, reliability, and cost efficiency amid heavy capital investment.

Still, some analysts have increased Oracle’s valuation outlook and discussed it as a possible first new trillion-dollar AI-cloud company of this cycle, should the projections hold. 

Risks, Costs & Sustainability

Despite the strong growth narrative, Oracle faces several significant risks. Moody’s recently raised concerns about Oracle’s reliance on its newly signed AI contracts, particularly the $300 billion deal reportedly with OpenAI, warning of “counterparty risk” if those commitments do not materialize as expected. The scale of investment required to deliver on those contracts may also strain the company’s balance sheet.

Margin pressure is another concern. Oracle’s cloud and AI infrastructure business is capital-intensive. According to coverage of its latest earnings, its non-GAAP operating income rose 7 percent, but its earnings per share of $1.47 missed expectations, underscoring sensitivity to cost and margin swings. Analysts also caution that some of Oracle’s large contract forecasts may be overly optimistic, suggesting that the market may be overestimating how much revenue will actually be recognized. 

Sustainability also depends on the diversification of customers. Should a major client like OpenAI change strategy or switch cloud providers, Oracle’s backlog and revenue projections could be at risk. The high capital expenditures and rapid scaling required complicate the challenge. Finally, long-term sustainability requires maintaining performance and efficiency across global data centers in the face of competition, cost inflation, and evolving technology demands.

What This Means & Looking Forward

Oracle’s stock surge and aggressive forecasts make clear that the company views itself as a serious contender in the AI infrastructure domain. Its strength lies in combining enterprise software assets, growing compute capability, and deep contractual commitments. If executed well, Oracle could shift how enterprises consume AI services.

In the near term, watchers should focus on whether Oracle can deliver on its roadmap. Key indicators include its ability to recognize revenue from its large contracts, manage margins amid heavy capital spending, and expand its customer base beyond a few flagship clients. Its deal with AMD to deploy 50,000 MI450 AI chips starting in 2026 is one such test of execution.

How competitors respond will also matter. AWS, Azure, and Google Cloud each control substantial share and scale. Oracle must demonstrate that it can compete on reliability, pricing, and technical ecosystem. Analysts who have downgraded Oracle point to valuation risk and forecast uncertainty. 

If Oracle can show that its projections were more than aspirational, that its infrastructure and AI business can reliably deliver, then the stock’s run may mark more than a speculative moment. But if margins compress or contracts falter, the current optimism could prove difficult to sustain.