Oracle Stock Rallies Amid AI Infrastructure Project
Oracle's (ORCL) stock soared Wednesday, along with other AI stocks, as President Donald Trump unveiled the Stargate AI infrastructure project in partnership with OpenAI and SoftBank.
At a press conference with OpenAI CEO Sam Altman, Oracle Chairman Larry Ellison, and SoftBank CEO Masayoshi Son, President Trump announced the ambitious technology initiative.
The Stargate project involves an initial investment of $100 billion and plans for up to $500 billion over the next four years to develop AI infrastructure. SoftBank, OpenAI, Oracle, and MGX are the initial equity funders. Arm, Microsoft, and Nvidia are technology partners. The project includes a data center already under construction in Texas.
Trump's Endorsement and Oracle's Potential
President Trump hailed Stargate as "the largest AI infrastructure project, by far, in history." Oracle's stock surged 6.8% to close at 184.22, breaking above its 50-day moving average. This marks six consecutive trading days of gains for Oracle, its longest streak since August 2024.
Analysts believe that Trump's support could further boost Oracle's stock. Wedbush analyst Dan Ives sees Stargate as the beginning of significant AI investments in the U.S., with more announcements expected from tech giants.
Ives also anticipates that Trump will actively pursue additional AI investments in the U.S., leveraging the China tariff negotiations as part of a broader strategy. He predicts that Project Stargate will benefit companies like Palantir, Microsoft, Oracle, Dell, Amazon, Google, and others.
Oracle's Role and Ellison's Influence
During the press conference, Trump praised Oracle's Ellison as "CEO of everything." Ellison, now 80 years old, founded Oracle in 1977 and remains its most prominent leader as chairman and chief technology officer.
Evercore ISI analyst Kirk Materne believes that the full impact of Stargate on Oracle remains uncertain, but it highlights the potential for collaboration between Oracle and the Trump administration.
Materne notes that President Trump's comments suggest Oracle is well-positioned to contribute to the administration's efforts in AI and digital initiatives aimed at enhancing government efficiency.
Oracle's Growth and Recent Performance
Oracle's stock witnessed remarkable growth in 2024, reaching its best performance since 1999. This growth was driven by Oracle's cloud infrastructure business, which attracted AI startups requiring cloud computing capabilities.
However, Oracle's stock has faced a recent setback, declining from a high of 198.31 reached on December 9. This decline followed Oracle's fiscal Q2 earnings report, which fell short of expectations for earnings and sales.
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