Oracle's stock on pace for best week since 2001 on cloud momentum
Oracle shares are on pace for their best week since 2001 as Wall Street cheers a strong earnings report and bullish comments on the company's prospects in cloud computing.
The stock is up about 24% for the week, with almost all the gains coming in the two trading days after the company's quarterly earnings release. The last time Oracle had a better week was in April 2001, in the midst of the dot-com crash, when so-called dead-cat bounces were common. The prior quarter Oracle shares lost almost half their value.
It's a much different company today, and while Oracle was generally viewed as a late entrant into the cloud infrastructure market, the company has found a niche and is seeing rapid growth helping clients operate artificial intelligence models.
"Oracle is in the enviable position of having more demand than it can fulfill," Joseph Bonner, an analyst at Argus Research, wrote in a note to clients on Friday. He recommends buying the shares and lifted his price target to $235 from $200.
Oracle rose to a record on Friday, topping $215.
In the company's earnings report late Wednesday, revenue and earnings topped estimates. CEO Safra Catz said sales for the new fiscal year should come in above $67 billion, higher than LSEG's $65.18 billion consensus.
"The demand is astronomical," Larry Ellison, Oracle's chairman told analysts on the earnings call. "But we have to do this methodically. The reason demand continues to outstrip supply is we can only build these data centers, build these computers, so fast."
Oracle has been playing catchup in cloud to rivals Amazon, Google and Microsoft.
In the 2025 fiscal year, Oracle's capital expenditures exceeded $21 billion, which is more than the company spent from 2019 to 2024. The sum should reach $25 billion in fiscal 2026, Catz said on the call.
Google anticipates $75 billion in capital spending this year. Microsoft's target for the fiscal year is $80 billion.
Oracle's client list now includes Meta, OpenAI and Elon Musk's xAI. They're among the companies that require the most Nvidia graphics processing units to train generative AI models that create text, images and videos in response to a few words of human input.
Startups Baseten, Physical Intelligence and Vast Data are also cloud clients, Oracle announced this week.
"We will build and operate more cloud infrastructure data centers than all of our cloud infrastructure competitors combined," Ellison said.
Oracle shares are up 28% so far in 2025, while the Nasdaq is roughly flat. Among the most highly valued U.S. tech companies, the next best performer for the year is Meta, which is up 17%.
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