Oracle’s shares increased Thursday, continuing the record run from the previous session and boosting tech stocks as the firm gets closer to the trillion-dollar club thanks to its AI cloud business’s explosive advances.
The impressive growth of the enterprise software provider, which was spurred by a string of multibillion-dollar cloud acquisitions, highlights the competition for processing power from businesses that are spending billions to take the lead in the AI race.
The rise in the stock also placed Larry Ellison, a co-founder of Oracle, on track to overtake Elon Musk as the richest man in the world.
Richard Hunter, head of markets at Interactive Investor, stated that “Oracle lit a fire under the rekindled AI trade” and that the company’s multibillion-dollar demand estimate has caused a “ripple effect” for companies tied to artificial intelligence.
The Wall Street Journal also revealed on Wednesday that OpenAI and Oracle had inked one of the largest-ever contracts for processing power, worth $300 billion, which is probably what will make up the majority of the additional revenue Oracle announced on Tuesday.
After rising as much as 35.9% on Wednesday, Oracle’s shares were up 1.5% in premarket trade, bringing the company’s market worth to a record closing of $933 billion.
Among the top performers in the S&P 500 index, the stock has nearly doubled in value this year, surpassing the gains of the so-called Magnificent Seven stocks.
In contrast to Tesla, whose $439.9 billion fortune currently tops Forbes’ worldwide wealth rankings, co-founder Ellison’s net worth increased by about $100 billion to $392.6 billion, primarily due to his 41% ownership in Oracle.
In comparison to its competitors in the cloud services space, Oracle’s stock was selling at a premium. Their price-to-earnings multiple for the next 12 months was 45.3, while those of Microsoft and Amazon were 31.3 and 31.3, respectively.
