Oracle Stock Surges on AI Infrastructure Project
Oracle (ORCL) stock surged Wednesday, rallying alongside other AI stocks, after President Donald Trump unveiled the Stargate AI infrastructure project with OpenAI and SoftBank.
The Stargate project, a major technology initiative led by President Trump, calls for an initial investment of $100 billion, with plans for up to $500 billion over the next four years to build AI infrastructure. SoftBank, OpenAI, Oracle, and MGX are the initial equity funders, while Arm, Microsoft, Nvidia are technology partners. The project includes a data center in Texas that is already underway.
Trump hailed the project as "the largest AI infrastructure project, by far, in history."
Oracle stock gained 6.8% on the stock market today, closing at 184.22. It surged above its 50-day moving average, extending its winning streak to six consecutive trading days, the longest since August 2024.
Trump's Praise Boosts Oracle Stock
Wedbush analyst Dan Ives wrote to clients that Stargate represents "the start of a wave of massive AI investments to take place in the U.S." and expects more big tech players to make announcements in the coming weeks.
Ives added that he expects "Trump to aggressively court more AI investments in the U.S.," with the China tariff negotiations serving as part of a broader geopolitical strategy. He believes Project Stargate is bullish for companies like Palantir, Microsoft, Oracle, Dell, Amazon, Google, and other players.
Oracle's Role Highlighted
During the press conference, Trump praised Oracle's CEO Larry Ellison as "CEO of everything" and an "amazing man and business person." Ellison founded Oracle in 1977 and stepped down as chief executive in 2014, but remains the company's prominent leader as chairman and chief technology officer.
Evercore ISI analyst Kirk Materne emphasized that the "fundamental impact" from Stargate for Oracle stock remains to be seen, but the announcement highlights opportunities for Oracle to collaborate with the Trump administration.
Oracle's Cloud Infrastructure Business
Oracle stock rallied by nearly 60% in 2024, its best year since 1999. Shares soared as Oracle's cloud infrastructure business attracted AI startups requiring cloud computing power.
However, Oracle stock has pulled back in recent weeks from a high of 198.31 reached on December 9. Oracle's fiscal Q2 earnings report that same day missed expectations for earnings and sales, triggering the decline.