Oracle share price jumps 36%, posts biggest one-day gain since 1992, adds $244 billion in market value

Oracle share price surged 36% after the company projected strong revenue growth in the coming years. The shares jumped 35.95% to $328.33 per share, marking their biggest single-day gain since 1992. With this rally, Oracle’s market capitalisation rose to $922 billion, surpassing the valuations of Eli Lilly, JPMorgan Chase, and Walmart.

The shares soared to their highest level since 1992 after the company issued an optimistic outlook for its cloud business, solidifying the software maker’s position in the race to support demand for artificial intelligence computing.

Oracle, a company renowned for its database software, has recently achieved success in the cloud computing sector and is emerging as a major provider of AI computing power, competing with cloud giants Amazon.com Inc., Microsoft Corp., and Alphabet Inc.’s Google.

The company signed a deal with OpenAI to provide 4.5 gigawatts of data centre capacity, enough energy to power millions of US homes, Bloomberg reported. The contract will be worth $300 billion over five years, the Wall Street Journal reported on Wednesday. Oracle also has major cloud customers, including Nvidia and ByteDance’s TikTok.

These deals helped lift remaining performance obligations, a measure of bookings, to $455 billion by the end of the fiscal first quarter, Oracle said on Tuesday. This is over four times higher than the same period a year earlier and roughly four times Google’s backlog, according to Bloomberg Intelligence, indicating that Oracle’s cloud-growth rate is expected to surpass Google’s.

The company signed four multibillion-dollar contracts with three different customers in the quarter and expects to sign up several additional customers in the coming months, Oracle Chief Executive Officer Safra Catz said.

Recent and upcoming bookings will lead to a rapidly growing cloud infrastructure business in the coming years, Catz said. That division will expand by 77% to $18 billion this financial year and continue to grow rapidly, reaching $144 billion in annual revenue by the financial year ending in May 2030, she said.

Oracle share price performance

Oracle's shares were already on a rise before the latest financial results. They increased by 45% this year through Tuesday’s close, four times the gain seen in the S&P 500. Its surge on Wednesday also boosted other AI stocks, including Nvidia, which rose 3.8%. In Asia, Nvidia suppliers rallied in Japan and South Korea, with Advantest Corp. up over 3% and SK Hynix Inc. increasing by 5.6%.

The company's forecast underscores the need for global AI developers to step up their investments. OpenAI, an Oracle customer, predicts it will need trillions of dollars over time to invest in the infrastructure needed to develop and run its services.

Major US companies have recently given investors grounds for optimism about the pace and sustainability of AI investment. Last week, Broadcom Inc. announced it had secured a major new customer in this sector.

(With inputs from Bloomberg)