Oracle Stock Surges 30% in Historic Week as AWS Cloud Deal Reshapes Multicloud Landscape

Quick overview

This week, Oracle Corporation (NYSE: ORCL) had its best week in more than 20 years. Shares rose about 30% to trade between $178 and $180, adding about $100 billion to the company’s market capitalization as a landmark cloud partnership with Amazon Web Services caught Wall Street’s attention.

The Oracle-AWS Bridge: Ending the Cloud Cold War

A broad multicloud networking agreement between Oracle Cloud Infrastructure (OCI) and AWS was the spark that set things in motion. It created a private, high-speed link between the two platforms that doesn’t use the public internet at all. The link can handle speeds of up to 100 gigabits per second. Most importantly, Oracle won’t charge for data transfers on its end of the connection. This is meant to get rid of one of the biggest economic obstacles to using cloud services in businesses.

For big companies that run complicated AI workloads on several clouds, the merger means a big change in how things are set up. Companies that used Oracle’s fast databases on OCI and trained AI models on AWS services like SageMaker experienced problems with latency and data transmission for a long time. The new bridge, which is set to open in AWS’s Northern Virginia area later this year, will completely get rid of that bottleneck. Oracle has already set up comparable direct links with Google Cloud and Microsoft Azure. The AWS deal was the last piece of what is now a full cross-cloud connectivity strategy.

Powering the AI Boom

The rally got even bigger when Oracle signed a deal with Bloom Energy, a company that makes fuel cells, to supply up to 2.8 gigawatts of fuel-cell capacity to power its AI data centers. This arrangement caused a 13% surge in the stock price in one day earlier this week.

The fundamentals of Oracle have given investors little reason to disagree with the excitement. The company made $17.19 billion in revenue in its most recent fiscal quarter. This was about 22% more than the same quarter last year and more than analysts had expected ($16.91 billion). Cloud sales went up 44% to $8.9 billion. The company’s remaining performance obligation, which is a forward indicator of contracted revenue, jumped 325% to $553 billion, which was probably the most shocking thing. Management wants to make $90 billion in sales in fiscal year 2027.

Oracle (ORCL) Stock Outlook

Most analysts agree with the move. Citizens Bank has a “Market Outperform” rating and a price target of $285, which means there is a lot of room for growth. Most people on Wall Street agree that the stock is a “Moderate Buy” with a target price of about $260. On Thursday, trading volume hit about 46.6 million shares, which is about 67% higher than normal. This shows how interested both institutions and regular people are.

That being said, not everyone is ready to join the rally. Bears refer to Oracle’s debt, which has grown to more than $124 billion as the company builds up its AI infrastructure quickly. Critics also point out the risk of relying too much on one source of income and say that the current pricing assumes that Oracle will be able to carry out its cloud and AI plans almost perfectly. The stock is still significantly behind its 52-week high of $345.72, and most experts think it will stay in the $170–$185 area for a while as the big weekly rise settles down.

The next quarterly earnings report will be the real test. It will show whether the AWS collaboration speeds up customer adoption, whether debt levels are reasonable, and whether Oracle’s goal of $90 billion in revenue is based on fact or wishful thinking.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

Beyond Meat Stock Surges 41% on New Products and Meme-Stock Momentum

2 hours ago

Save

Avis Budget Group (CAR) Stock Surges 23% in Wild Short Squeeze Frenzy

4 hours ago

Save

Plug Power Surges 16% as Hydrogen Comeback Gains Momentum

5 hours ago

Save