Oracle Stock Surges 40% in a Single Day to Record High on Explosive Growth in AI Cloud Infrastructure Demand

Abstract

Oracle's stock surged 40% on September 11, marking its best single-day performance since 1992, with its market capitalization nearing the $1 trillion mark. The company reported Remaining Performance Obligations (RPO) of $455 billion, a staggering 359% increase year-over-year, significantly exceeding analysts' expectations of $180 billion, primarily driven by surging demand for AI cloud infrastructure.

While Oracle's first-quarter earnings report, released after market close on September 10, showed slightly lower-than-expected revenue and EPS, the astonishing order backlog for its cloud infrastructure business shocked the tech world. The company projects cloud infrastructure revenue to reach $18 billion in fiscal year 2026, with plans to achieve $32 billion, $73 billion, $114 billion, and $144 billion in the subsequent four years, respectively.

This explosive growth primarily stems from the immense demand for cloud computing resources fueled by the AI boom. As one of the few cloud service providers offering access to Nvidia GPUs, Oracle has distinguished itself in the fierce cloud computing market, competing intensely with giants like Microsoft, Amazon, and Google.

Stock Performance Reaches Historic Highs

Oracle's stock soared 40% on September 11, marking its best single-day performance since 1992. Its market capitalization currently stands at $950 billion, rapidly approaching the $1 trillion threshold. This surge made Oracle the top-performing large-cap tech stock of the day.

Company founder Larry Ellison's net worth increased by approximately $100 billion as a result. According to the Bloomberg Billionaires Index, he is now the world's second-richest person, trailing only Tesla CEO Elon Musk.

Cloud Order Backlog Far Exceeds Expectations

Key data disclosed by Oracle in its earnings report stunned Wall Street analysts. The company's Remaining Performance Obligations (RPO) reached $455 billion, a 359% surge from the previous year, significantly surpassing analysts' expectations of $180 billion.

Ben Reitzes, head of technology research at Melius Research, told CNBC, "This is a very historic performance for Oracle. Wall Street was expecting RPO to be around $180 billion, and they reported a number that was several multiples of that, which is shocking."

Strong Demand for AI Infrastructure

Oracle has been one of the biggest beneficiaries of the AI boom, thanks to its cloud infrastructure business and access to Nvidia Graphics Processing Units (GPUs), both essential for running large AI workloads.

The company's strong performance in AI infrastructure has garnered significant attention from analysts. Deutsche Bank analysts, in a Wednesday research note, called Oracle's results "truly awesome" and raised their price target from $240 to $335.

Bank of America analysts stated that Oracle's "exceptional backlog" solidifies its position as a "key AI enabler" and upgraded the stock's rating from Neutral to Buy.

Clear Long-Term Growth Prospects

Oracle has set ambitious growth targets for the coming years. The company projects cloud infrastructure revenue to reach $18 billion in fiscal year 2026, with plans for annual revenues of $32 billion, $73 billion, $114 billion, and $144 billion in the subsequent four years, respectively.

These projections demonstrate Oracle's confidence in the sustained growth of the AI cloud services market and reflect the rapid expansion of enterprise demand for AI infrastructure.

First Quarter Financial Performance

Despite the astonishing cloud order backlog, Oracle's traditional financial metrics for the first quarter were somewhat subdued. The company's adjusted earnings per share (EPS) was $1.47, slightly below analysts' expectations of $1.48; first-quarter revenue was $14.93 billion, falling short of the anticipated $15.04 billion.

However, investors and analysts are clearly more focused on the company's future growth potential, particularly its leading position in AI cloud services.

Intensifying Industry Competition

While Oracle has performed exceptionally well in AI cloud infrastructure, competition remains fierce. Oracle is vying for customers with other cloud service providers such as Microsoft, Amazon, and Google.

Nevertheless, Oracle holds a favorable position in this AI race, thanks to its unique database technology advantages and priority access to Nvidia GPU resources.

Analyst Perspectives

Several Wall Street analysts expressed shock and approval regarding Oracle's performance. Gil Luria of D.A. Davidson called the performance "absolutely stunning" on CNBC's "Fast Money." Wells Fargo analysts considered it a "major confirmation of the AI trade."

Deutsche Bank analysts stated, "In our nearly 20 years of covering Oracle and the broader software industry, few quarterly results have matched the magnitude of revision and timing clarity of this Q1."

Market Impact

Oracle's astonishing performance not only boosted its own stock price but also injected confidence into the entire cloud computing and AI infrastructure sector. The company's success once again demonstrates the transformative power of AI technology for traditional enterprises and the critical role of cloud infrastructure in the digital economy.

This performance indicates that the AI cloud services market still has immense growth potential, providing significant market signals for relevant companies and investors.