Artificial Intelligence Contender Enters the Trillion-Dollar Elite - Potentially the Most Unnoticed AI Shares in the Market
Oracle, the tech giant, has been making significant strides in its cloud segment, with Oracle Cloud Infrastructure (OCI) now its fastest-growing segment. This growth is reflected in Oracle's recent crossing into the trillion-dollar market capitalization.
Oracle's transformation is a result of a combination of financial strength and execution risk. The company has been securing multibillion-dollar partnerships and contracts, such as the one with OpenAI's 'Project Stargate', scheduled to begin around 2027, and four multibillion-dollar contracts with three other enterprise customers for OCI.
In a $300 billion deal, Oracle has partnered with OpenAI to provide large-scale computing power for AI workloads on OCI. This partnership positions Oracle as a major AI infrastructure provider, competing with tech giants like Microsoft and Google. Additionally, Oracle collaborates with Absci, a biotech company, and AMD to enhance generative AI-driven drug discovery using OCI's AI infrastructure and AMD’s advanced GPUs.
Oracle's latest earnings report shows a $455 billion increase in remaining performance obligations (RPO), up more than 350% year over year. This increase, along with high-profile AI partnerships and accelerating OCI growth, suggests that Oracle could become a credible challenger in the global cloud market.
The growth of Oracle's cloud infrastructure is particularly notable in the AI market, a shift that few investors anticipated two years ago. Oracle's revenue from OCI is expected to grow about 77% in fiscal 2026 to $18 billion.
Building cloud infrastructure at a global scale is capital-intensive and requires flawless execution to turn contracts into sustainable growth. However, for patient investors, the focus should be on where Oracle could go in the decade ahead, rather than where it has been.
Oracle's massive backlog, high-profile AI partnerships, and accelerating OCI growth indicate a promising future. The company has also partnered with Nvidia and Microsoft to expand capacity quickly, ensuring it can handle workloads that demand enormous computing power.
Investors seeking exposure to AI infrastructure should keep Oracle on their radar. Oracle's RPO alone rivals the annual revenue of some of the world's largest tech companies, making it a significant player in the AI market. For Oracle, the future looks bright as it continues to make strides in cloud infrastructure and AI.
Read also:
- Electric-powered vessels take to the waters of Maine
- Elon Musk accused by Sam Altman of exploiting X for personal gain
- Comparing the value of top electric scooters: Kinetic DX versus Bajaj Chetak versus TVS iQube - Which one offers the best bang for the buck?
- American Eagle's risque promotional effort featuring Sydney Sweeney leads to the brand being categorized as a 'trendy stock' among teenagers.
