Oracle

It has been an up and down year for Warren Buffett’s portfolio. Many of his biggest positions have been trimmed aggressively. But according to recent filings, his holding company, Berkshire Hathaway, is loading up on one of Buffett’s favorite stocks. Last quarter, it boosted its position by more than $500 million.

On paper, this stock has it all. It’s priced at a discount to the market, offers a compelling dividend yield, and could generate impressive growth over the next few years.

This has been one of Warren Buffett’s favorite stocks since 2020

Berkshire Hathaway first took a position in Chevron (CVX 0.94%) back in 2020, not long after the nadir of the COVID-19 flash crash. Buffett’s estimated purchase price was around $80. But over the years, he has managed the position aggressively. In early 2021, for instance, just one year after his initial purchase, Buffett slashed his Chevron stake by more than 50%. Towards the end of 2021, however, he began rebuilding his position. Several more purchases and sales occurred in 2022, including the massive acquisition of 121 million shares in the first quarter.

Notably, Berkshire has been a net seller in recent quarters. In six of the past seven quarters, for example, Berkshire has sold more Chevron stock than it purchased. But that all changed this quarter when Buffett purchased nearly 3.5 million shares worth roughly $520 million. It was one of the biggest stock purchases of the quarter for Buffett, giving Berkshire a 7% stake in the entire business.

Why did Buffett load up on this giant oil stock that he knows so well? The numbers below paint a compelling picture.

Chevron stock looks very attractive for certain investors

After several consecutive winning years, the stock market as a whole isn’t obviously a value right now. The S&P 500, for example, trades at 31 times earnings — well above its long-term average. Chevron stock, meanwhile, trades at just 19 times earnings. Revenue growth is stagnant right now, but free cash flow remains high, helping to support a 4.5% dividend yield.

Part of the challenge with Chevron stock right now isn’t under its direct control. Oil prices slid heavily this year, falling under $60 per barrel. Oil inventories continue to rise, with meaningful surpluses expected in 2026 due to rising production globally. In total, it’s a tough place to be for businesses that sell oil.

As an integrated producer, with interests in refining, chemical production, and even energy generation for artificial intelligence applications, Chevron has long been able to manage industry cyclicality with ease. Chevron’s CEO focuses on cost controls and capital efficiency to ensure profits remain stabilized even with low oil prices. But unless those oil prices move higher, expect so-so results from Chevron — a big reason why shares have traded sideways since 2022.

Here’s the thing: Chevron stock is still a very compelling purchase for certain investors. If you’re finding it difficult to find market values, are worried about a potential bear market, or believe geopolitical tensions are about to rise, allowing oil prices to recover quickly, Chevron shares could be a fit. While shares aren’t a steal, they are arguably fairly valued at 19 times earnings. The dividend yield and free cash flow consistency, meanwhile, can help offset losses during a market downturn. And given ongoing geopolitical disputes, it’s not unreasonable to expect sudden shifts in oil demand and supply.

All in all, this looks like a classic move for Buffett in this market environment. He understands Chevron’s business model well, and with a rising cash hoard, it’s clear that he’s finding it difficult to spot market bargains. Chevron is as close to a value stock in today’s environment as it gets.

Shares of database and cloud giant Oracle (ORCL -6.72%) plunged as much as 8.1% on Friday, before recovering slightly to a 6.9% decline on the day.

Oracle held an analyst-attended Investor Day presentation yesterday, where the company clarified some of its long-term targets. While the guidance to 2030 was fairly impressive, it appears investors are “selling the news” after the stock’s tremendous gains over the past couple of months.

Oracle lives up to some of the hype, but investors wanted more

In the presentation, Oracle gave some more detail around its cloud infrastructure growth and margins out over the long term. Oracle’s cloud growth has been a subject of some debate, especially after the company announced a massive 359% growth in its cloud RPO in September to $455 billion, with the majority of that growth coming from a single contract with OpenAI.

Some were skeptical about that projection, as well as the margins on the project, given the huge customer concentration around OpenAI, with one analyst noting that Oracle was only making a 14% gross margin on its cloud infrastructure services today.

However, Oracle disclosed yesterday that it predicts between 30% and 40% gross margin on its large cloud infrastructure deals, which is higher than what was feared. Moreover, Oracle projected a whopping $225 billion in revenue by 2030, as well as $21 per share in earnings. Of that revenue, management expects about $166 billion to come from Oracle’s cloud infrastructure unit by that time.

Those targets were actually above the analyst consensus heading into the day. And yet, the stock still sold off on that news. After today’s plunge, Oracle’s stock trades around $291 per share, or 13.9 times that 2030 earnings figure.

That seems strikingly cheap, but investors should remember that it’s only 2025, and there is a time value of money to account for when valuing a stock through the discounted cash flow method.

Moreover, a 30% to 40% gross margin on the cloud operations may still be disappointing to some, given that leader Amazon Web Services has already achieved a 36.8% operating margin — not gross margin, but operating margin — over the past 12 months.

Image source: Getty Images.

Oracle made its big AI play, and investors are divided

It should be noted that while investors are selling the news today, analysts are actually raising their Oracle price targets, with sell-side analysts at Guggenheim and T.D. Cowen both raising their price targets to $400, up from $375, after the event.

Oracle has made its AI gambit by partnering with OpenAI, betting big on the success of the current industry leader. OpenAI has committed to hundreds of billions in cloud contracts, even though it’s currently losing money, having made a reported $4.3 billion in revenue in the first half of 2025 and burning through $2.5 billion in cash.

So, Oracle’s anticipated growth may carry more risk than the typical cloud giant, and it appears investors took some of that risk off the table on Friday.

Shares of database and cloud giant Oracle (ORCL -0.47%) rallied 24.4% in September, according to data from S&P Global Market Intelligence.

Oracle named two new co-CEOs to succeed current CEO Safra Katz, and the Donald Trump Administration also gave its approval to the general terms for Oracle to acquire part of TikTok U.S., and to also manage the app.

Normally, those would have been fairly consequential events, but they weren’t really the reason for Oracle’s September rise. While the CEO change was significant, Chairman Larry Ellison is still heavily involved in Oracle’s operations and strategy.

Rather, the main event was Oracle’s second quarter earnings call Sept. 9, when the company disclosed an absolutely massive increase in its cloud unit’s remaining performance obligations (RPO). That sent Oracle’s stock up nearly 40% the following day — an astonishing rally for a company of that size — before the stock settled back into a 24.4% gain.

Image source: Getty Images.

Oracle’s RPO goes parabolic

Interestingly, when Oracle reported first fiscal quarter earnings, it missed expectations on both the top and bottom lines, with revenue growing a solid-but-not-spectacular 12.3%.

But of course, it wasn’t the prior quarter but rather the future that got investors incredibly excited. To that end, Oracle recorded a massive 359% increase in its cloud unit’s remaining performance obligations (RPO), which is contracted capacity to be used in future years.

It was subsequently reported the massive growth was due to OpenAI, which signed a $300 billion agreement to rent AI compute capacity from Oracle for five years starting in 2027.

OpenAI is the creator of ChatGPT, the first mover in AI large language models. So while the massive increase in Oracle’s RPO was great to see, some might have been skeptical about where the money-losing OpenAI would find all the cash needed to fulfill the contract.

The question was partially answered later in the month, when Nvidia (NVDA 1.25%) and OpenAI agreed to a long-term funding agreement. Under that agreement, Nvidia will invest up to $100 billion in OpenAI in order to fund 10 gigawatts of data centers, with the first tranche set to come online in late 2026.

So, it appears that Nvidia will help OpenAI pay for its massive new cloud contract with Oracle, which likely alleviated at least some of the potential funding concerns for Oracle’s RPO.

Can the Oracle-OpenAI-Nvidia trio take on the rest of the Magnificent Seven?

The artificial intelligence wars are heating up, with the major cloud computing companies in the Magnificent Seven spending tens of billions or even $100 billion-plus this year to win the AI race, and perhaps even achieve artificial general intelligence.

Coming into the month, Oracle was an AI player, though not one of the biggest as a distant fourth-place cloud provider. OpenAI, the first mover in LLMs, is still a startup, growing fast but still losing billions every year. And while Nvidia dominates in AI GPUs today, all the big clouds are also developing their own custom AI chips.

So these three players, which all have strengths but lack the all-in-one breadth of the leading cloud infrastructure players, appeared to team up in September. It will be very interesting to see if the three-way alliance can outpace the rest of the cloud giants in the AI races, which should get very interesting through the rest of this decade.

Another pair of influencers might be joining President Trump’s effort to preserve TikTok in the U.S.: Rupert and Lachlan Murdoch.

The Trump administration has been working on a deal that would keep the wildly popular social video service operational for millions of Americans. Under a law signed by President Biden, TikTok’s U.S. service must separate from its Chinese parent company, ByteDance, or face going dark.

Congress passed the law out of security concerns over TikTok’s ties to China and worries that the app would give the communist government access to sensitive user data, which TikTok has denied doing.

Trump revealed more details about the plan over the weekend. The president on Sunday told Fox News that people involved in the deal include Oracle Corp. cofounder Larry Ellison, Dell Technologies Chief Executive Michael Dell and, probably, Rupert Murdoch and his eldest son, Lachlan.

“I think they’re going to be in the group, a couple of others, really great people, very prominent people,” Trump said on “The Sunday Briefing” on Fox News. “They’re also American patriots. They love this country, so I think they’re going to do a really good job.”

If the Murdochs were to be involved, it could be through their media company Fox Corp. investing in the deal, according to a source familiar with the matter who was not authorized to comment publicly. Fox Corp. owns Fox News, Fox Business and the Fox broadcast network. Fox News’ opinion hosts are vocally supportive of Trump.

The pending agreement would hand over TikTok’s U.S. operations to a majority-American investor group, White House press secretary Karoline Leavitt told Fox News on Saturday. The app’s data and privacy in the U.S. would be led by Texas-based cloud computing company Oracle, she added.

Oracle’s cofounder and chief technology officer Ellison is a Trump ally who is the world’s second-richest person, according to Forbes. TikTok already works with Oracle. Since October 2022, “all new protected U.S. user data has been stored in the secure Oracle infrastructure, not on TikTok or ByteDance servers,” TikTok says on its website.

Leavitt told Fox News that six out of the seven board seats controlling the TikTok app in the U.S. would be held by Americans and that the app’s algorithm would be controlled by America.

“We are 100% confident that a deal is done,” Leavitt said.

In a Monday news briefing, Leavitt said Trump expected to sign the deal later this week.

ByteDance would retain a less than 20% stake in TikTok U.S. The investor group is still being sorted out, reported CNN, citing a White House official.

The White House, Dell Technologies and Oracle did not immediately return a request for comment. Fox Corp. declined to comment.

TikTok’s future has been uncertain for months since the law was signed. After Biden had signed the 2024 law, ByteDance was initially given a deadline of Jan. 19, which has since been extended several times by Trump. The current deadline is Dec. 16.

Any deal would also need the approval of the Chinese government.

On Friday, Trump suggested on his social media platform Truth Social that China’s president, Xi Jinping, had approved the pact during a call between the two leaders.

Reports cited Xinhua, China’s state-run news agency, which quoted Xi as saying the Chinese government “respects the wishes of companies and welcomes them to conduct commercial negotiations based on market rules and reach solutions that comply with Chinese laws and regulations and balance interests.”

ByteDance in a statement on Friday thanked President Xi and President Trump “for their efforts to preserve TikTok in the United States.”

“ByteDance will work in accordance with applicable laws to ensure TikTok remains available to American users through TikTok U.S.,” the company said.

Trump has said he believes TikTok played a key role in helping him reach younger voters and win the 2024 presidential election. During his first term, he was a prominent voice calling for TikTok to be banned during his broader campaign against China over trade and COVID-19.

Broadcom (AVGO -0.06%) and Oracle (ORCL 1.72%) have been two of the best-performing mega-cap growth stocks in 2025. As of this writing, Broadcom is up 19% since reporting earnings on Sept. 4, and Oracle soared 36% on Sept. 10 in response to its own blowout earnings and guidance.

Broadcom is getting closer to reaching a $2 trillion in market cap, and Oracle is knocking on the door of $1 trillion. Yet, you won’t find either of these stocks in the “Magnificent Seven,” which only includes Nvidia (NVDA -0.20%), Microsoft (MSFT 0.73%), Apple (AAPL 2.98%), Amazon (AMZN 1.04%), Alphabet (GOOG 0.69%) (GOOGL 0.65%), Meta Platforms (META -1.32%), and Tesla (TSLA 1.48%).

The “Ten Titans” corrects that error by adding Broadcom, Oracle, and Netflix (NFLX 1.38%) to the group. Combined, these 10 growth stocks now make up 39.1% of the S&P 500 (^GSPC 0.28%).

Here’s how the Ten Titans have disrupted the stock market in just a few years and why their dominance in the S&P 500 can still impact your investment portfolio, even if you don’t own any of the Ten Titans outright.

Image source: Getty Images.

A lot has changed in less than three years

The S&P 500 is up a staggering 70% since the start of 2023, and a big reason for that is artificial intelligence (AI). Specifically, a few major companies are profiting from AI through semiconductors and associated networking hardware, software infrastructure, cloud computing, automation, and efficiency improvements.

The Ten Titans encapsulate this theme. The group is now double the market cap of China’s entire stock market and is largely responsible for moving the S&P 500 in recent years.

At the end of 2022, the Ten Titans made up 23.3% of the S&P 500. But since then, many of the Titans have increased in value several-fold, with Nvidia and Broadcom leading the pack.

Data by YCharts.

The Ten Titans’ combination of size and rapid gains has redefined the structure of the S&P 500. Here’s a look at each company’s weight in the S&P 500 as of this writing.

Data source: Slickcharts.

Oracle’s surge on Sept. 10 briefly pole-vaulted it to become the tenth-largest company by market cap. At that time, the nine largest names in the S&P 500 were all tech companies — a far cry from the days when the most valuable U.S. companies were from the oil and gas, consumer staples, financials, and industrial sectors.

The Ten Titans’ influence is growing

Even if you don’t own any of the Ten Titans stocks, their rise may still have ripple effects for your financial portfolio.

The biggest impact would be if you own index funds or exchange-traded funds (ETFs) with exposure to these holdings. Market-cap weighted passive funds that follow a growth theme or the general market will likely have sizable positions in the Ten Titans. And S&P 500 funds that mirror the index, like the Vanguard S&P 500 ETF, SPDR S&P 500 ETF, the iShares Core S&P 500 ETF will all have around 39% of their holdings in the Titans.

The sheer size of the Ten Titans means that the S&P 500 is no longer a balanced index, at least for now. Rather, it’s more of a growth index, similar to how the Nasdaq Composite is typically viewed.

The S&P 500 may contain hundreds of holdings, but its performance is now based on just a couple dozen companies. Investors looking for mid-cap or even large-cap stocks should venture outside the index because the S&P 500 offers little exposure to non-mega-cap names.

Navigating a Ten Titans-dominated market

The rise of the Ten Titans has benefited their shareholders, S&P 500 index fund investors, and folks with exposure to these stocks through ETFs. However, because they are so big, they will likely make the S&P 500 more volatile going forward.

Investors can offset the Ten Titans concentration by investing in value and dividend stocks that no longer make up a large percentage of the S&P 500. On the other hand, if you’re looking for a low-cost and straightforward way to get exposure to top growth stocks, the S&P 500 may be one of the simplest ways to do so.

On Wall Street, market cap serves as a differentiator of good and great businesses. While there are plenty of budding small- and mid-cap companies, businesses with valuations in excess of $10 billion have (more often than not) demonstrated their innovative capacity and backed up their worth to Wall Street.

But among this class of proven businesses is a truly elite group of 11 public companies that have reached the psychologically important trillion-dollar valuation plateau, not accounting for the effects of inflation over time (looking at you, Dutch East India Company). These 11 indelible titans include all seven members of the “Magnificent Seven,” Broadcom, Berkshire Hathaway, Taiwan Semiconductor Manufacturing, and Saudi Aramco, the latter of which doesn’t trade on U.S. exchanges.

Image source: Getty Images.

Last week, integrated cloud applications and cloud infrastructure services provider Oracle (ORCL 3.33%) came within a stone’s throw of becoming the 12th public company to reach at least a $1 trillion valuation before retreating. While the rise of artificial intelligence (AI) makes it a logical candidate to eventually surpass a market cap of $1 trillion, there’s another industry leader that’s ideally positioned to become Wall Street’s next trillion-dollar stock.

Oracle came oh-so-close to entering the trillion-dollar ranks

Following the closing bell on Sept. 9, Larry Ellison’s company delivered nothing short of a jaw-dropper with its fiscal 2026 first-quarter operating results.

It’s exceptionally rare when a megacap company moves by a double-digit percentage in a single trading session. At one point on Sept. 10, Oracle stock was higher by more than 40% and peaked at a market cap of $982 billion. Though it’s given back $150 billion in market value since its Sept. 10 peak, it closed out the week with a 25% gain, which isn’t shabby at all.

The hoopla surrounding Oracle has to do with its updated remaining performance obligations (RPO) forecast — RPO is essentially a backlog of future revenue based on contracts signed — and projected growth ramp for its high-margin Oracle Cloud Infrastructure (OCI) segment. OCI offers on-demand cloud-computing services, which can run AI workloads on private, public, and hybrid clouds, and also leases out AI compute.

On a year-over-year basis for the quarter ended Aug. 31, Oracle announced its RPO jumped 359% to $455 billion on the heels of signing four multibillion contracts during the fiscal first quarter. During the company’s conference call, CEO Safra Catz singled out privately held OpenAI and xAI, as well as Magnificent Seven members Meta Platforms and Nvidia, as some of these significant cloud contracts.

What’s perhaps even more impressive than the growth of Oracle’s backlog is its projected ramp in sales from OCI. Catz laid out a stunning growth forecast that calls for:

• 77% sales growth to $18 billion in fiscal year (FY) 2026
• 78% sales growth to $32 billion in FY 2027
• 128% sales growth to $73 billion in FY 2028
• 56% sales growth to $114 billon in FY 2029
• 26% sales growth to $144 billion in FY 2030

Catz and Oracle co-founder/Chief Technology Officer Larry Ellison have outlined a clear path to outsized growth that the company has lacked since the dot-com days. However, a wait-and-see approach from investors may be preferred in the quarters to come given that Oracle has missed Wall Street’s earnings per share consensus in three of the last four quarters. This could stall its efforts to quickly join the elite trillion-dollar club.

Image source: Getty Images.

This is the sensational company that can beat Oracle to the trillion-dollar plateau

Considering how Wall Street lives and breathes anything having to do with AI, you might be thinking a tech company is the next logical candidate to reach the trillion-dollar plateau. But what if I told you that time-tested retailer Walmart (WMT 0.14%), which closed out last week with a market cap of $825 billion, has an inside path to a $1 trillion valuation?

On the surface, things might not seem perfect for the retail industry. Recent job market revisions point to a potentially weakening U.S. economy.

At the same time, the effects of President Donald Trump’s tariff policies have begun to show up in monthly inflation reports. Between May and August, the trailing-12-month inflation rate, based on the Consumer Price Index for All Urban Consumers (CPI-U), rose by 67 basis points to 2.92%. When coupled with a weakening job market, rising inflation ignites fears of stagflation, which is a worse-case scenario for the Federal Reserve.

These scenarios are typically bad news for most retailers — but Walmart isn’t “most retailers.”

For decades, Walmart’s success has derived from its focus on value and convenience. When times are tough or uncertain in America, people turn to Walmart for a good deal on groceries, toiletries, and countless other items. If Trump’s tariffs are eventually ruled legal by the Supreme Court and remain in place, their inflationary impact is only going to drive more consumers, including affluent shoppers, into Walmart stores. Even if the company eats a portion of these tariffs, the benefit from increased foot traffic more than outweighs its sacrifice.

To build on this low-cost/value point, Walmart undeniably uses its size to its advantage. It has deep pockets and purchases products in bulk to lower its per-unit cost. This allows it to undercut mom-and-pop shops and national grocery chains on price and keeps consumers confined to its ecosystem of products and services (especially when they live close to a supercenter).

Another key to Walmart’s success has been its embrace of technology. Promoting its online retail channels and Walmart+ subscription service helped lift global e-commerce sales by 25% during the fiscal 2026 second quarter (ended July 31), and has pushed its U.S. e-commerce operations into the profit column. It’s also leaning into AI as a way to improve supply chain management and improve order fulfillment times.

It would only take a 21% move higher for Walmart to become the 12th public company to reach $1 trillion, and it looks to be in an ideal position to do so.

Shares of Broadcom (AVGO 0.19%) and Oracle (ORCL -5.05%) both ripped higher around earnings, with Oracle’s one-day surge among the biggest in decades. Broadcom, a chip and infrastructure-software company, continues to ride custom artificial intelligence (AI) accelerators and high-end networking. Oracle, the database and cloud provider, stunned investors with a massive jump in contracted work tied to AI demand.

The question for investors is which AI stock looks more attractive after these moves. Looking through the numbers and today’s prices, the edge goes to the company with faster AI growth in hand and a clearer path from bookings to revenue.

Image source: Getty Images.

Broadcom: strong execution, premium price

Broadcom’s most recent quarter underscored how central AI has become to results. In the third quarter of fiscal 2025 (the quarter ended Aug. 3), revenue rose 22% year over year to about $16 billion, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin was 67%, and non-GAAP earnings per share was $1.69. Management also guided for fourth-quarter revenue of about $17.4 billion and said AI semiconductor revenue should climb to roughly $6.2 billion in the fourth quarter after growing 63% to $5.2 billion in the third. Free cash flow hit $7.0 billion, or 44% of revenue.

Summing the last four reported quarters puts Broadcom’s trailing-twelve-month non-GAAP earnings per share at about $6.29. At the stock’s price at the time of this writing, near $365, the stock trades around 58 times that trailing-12-months (TTM) figure — rich even after factoring in Broadcom’s breadth across AI accelerators, ethernet switching, and VMware-driven infrastructure software.

One key risk for Broadcom is that a large slice of near-term growth depends on just a handful of hyperscale customers, and cyclical pockets in legacy networking or storage can offset AI strength. Still, Broadcom‘s cash generation, dividend capacity, and guidance argue for durable fundamentals as AI builds out. The question is whether that durability is already priced in.

Oracle: bookings shock — and a new bar to clear

Oracle’s fiscal first quarter of 2026 (the quarter ended Aug. 31) changed the story. Revenue rose 12% to $14.9 billion, non-GAAP EPS increased 6% to $1.47, and — most importantly — remaining performance obligations (RPO) soared 359% to $455 billion on the back of four multi-billion-dollar AI agreements. Yes, you heard that right. Cloud revenue grew 28%, including 55% growth in infrastructure-as-a-service. Investors reacted in dramatic fashion, sending the stock up roughly 36% in a day.

In the company’s earnings release, CEO Safra Catz called it “an astonishing quarter,” adding that demand for Oracle Cloud Infrastructure is building and that more large contracts could follow. Management also previewed a multi-year framework for accelerating Oracle Cloud Infrastructure revenue growth tied to these wins. Momentum in the business is visible in the reported numbers and management’s commentary, but RPO is a commitment that must convert to usage; investors will need to see that flow through revenue and margins over time.

Trading at about $315 as of this writing, Oracle trades roughly 52 times TTM non-GAAP earnings — also expensive, but a discount to Broadcom on this basis. The stock’s violent move higher means execution against that towering backlog is now the key driver of returns from here.

Both companies are clear AI winners. Broadcom has revenue and cash flow already showing up from AI hardware and networking, plus a software portfolio that throws off steady cash. Oracle just unlocked a wave of contracted demand that, if it converts as management expects, could drive years of cloud infrastructure growth.

Choosing between them comes down to what is embedded in the share prices. Broadcom offers observable AI revenue today, but the stock carries a higher non-GAAP TTM price-to-earnings multiple. Oracle’s valuation is lower (though still elevated) and is now backed by a backlog that, if it turns into actual consumption, could reset the company’s growth profile. Given the trade-off — realized AI revenue at a steeper multiple versus massive contracted AI demand at a somewhat lower one — Oracle looks slightly more compelling for investors willing to accept the execution risk of turning record bookings into billable usage at healthy margins. Broadcom remains a high-quality AI play, but its premium leaves less room for error after the recent rally.

When I visited the Silicon Valley headquarters of Oracle (ORCL -5.05%) 25 years ago as a young technology reporter, I was dumbstruck.

The stunning campus of glistening emerald towers surrounding a placid lake looked positively otherworldly to me, something akin to the Emerald City of Oz that summoned Dorothy and her ragtag gang in The Wizard of Oz. “This place looks like the future,” I kept thinking.

The enterprise software firm has since relocated to Texas, but its future is now.

Many of the big tech names of the 1990s have faded from view — acquired, outmoded, or outcompeted.

Not Oracle. The stock is up 79% year to date and rose about 39% on Sept. 10.

What happened?

On Sept. 9 after the market closed, the software giant announced its results for the fiscal first quarter, ended Aug. 31, and they were as awe-inspiring as that original emerald campus.

Now, however, instead of back-office systems, the company’s fortunes are surging on the cloud.

A burgeoning backlog

But it wasn’t the revenue or earnings results that sent the stock skyward. In fact, quarterly revenue of $14.9 billion was up 12% from a year ago but still slightly below Wall Street’s expectations of $15 billion. And earnings per share of $1.47, up 6% from last year, came in a penny below expectations.

All that mattered little. It’s the backlog of business that stunned the market and sent the share price soaring.

Oracle said it expects revenue from its cloud infrastructure unit to surge 77% this year, to $18 billion. It also posted a huge surge in bookings in the latest quarter and signed four multibillion-dollar contracts with three different customers in the quarter.

The company’s remaining performance obligations — expected future revenue from signed contracts that has not yet been collected — surged during the quarter to $455 billion, a jump of 359%.

If that’s not the future, I’m not sure what is.

Multibillion-dollar customers

“Clearly, it was an excellent quarter and demand for Oracle Cloud infrastructure continues to build,” CEO Safra Katz said on the Sept. 9 earnings call. “I expect we will sign additional multibillion-dollar customers.”

CEOs often speak in hyperbole on earnings calls. But in this case Katz’s language seemed subdued, if anything. Multicloud-based revenue from Microsoft, Alphabet, and Amazon soared more than 1,500% in the quarter.

Oracle Chairman and Silicon Valley legend Larry Ellison said the company expects to deliver another 37 data centers to these three tech giants over the next few years, taking the total to 71.

Image source: Getty Images.

Pure gold

By the way, due to Oracle’s incredible run-up, Ellison’s fortune soared $90 billion to more than $380 billion, putting him right behind the world’s richest person, Elon Musk.

To incentivize his sales force, Ellison once paid bonuses in gold coins. He wanted to reward ruthlessness and drive competitors out of business.

It worked, as several early competitors — Sybase and Informix are a couple of them — stagnated or were swallowed up by other companies.

Ellison no longer pays bonuses in gold. But Oracle is certainly a golden stock for its shareholders.

It’s not often that a stock absolutely skyrockets right after it misses analysts’ expectations for both revenue and profits, but that was what Oracle (ORCL -4.50%) did following its recent fiscal 2026 first-quarter report. The market’s excitement about the stock appeared to stem from the company’s growing cloud computing business. The stock has now more than doubled so far in 2025.

Let’s take a closer look at Oracle’s earnings report and prospects to see whether or not it’s too late to buy the stock.

Cloud excitement

Sometimes there is a last-mover’s advantage, and in the cloud computing space, Oracle appears to have one. Before the artificial intelligence (AI) boom, the company’s cloud computing unit was new and pretty small. However, it’s now building it out quickly with all the latest technology. As a result, top AI model companies are flocking to its services, and even the big three cloud computing infrastructure providers — Amazon, Alphabet, and Microsoft — are partnering with it.

Oracle is particularly excited about its opportunity in the inference space. It said it has a big edge because its customers can connect all of their Oracle databases and cloud storage to “vectorize” their data. They can then apply the large language model (LLM) of their choice to answer questions using a combination of private enterprise data and publicly available information. It expects the AI inference market to become much bigger than the AI training market over time.

Image source: Getty Images.

Oracle’s cloud computing strength could be seen in its latest quarterly results. Its cloud infrastructure revenue surged 55% year over year to $3.3 billion. Meanwhile, within the segment, it said its multicloud database revenue from the big three cloud providers soared by 1,529% in the quarter. Meanwhile, it plans to build 37 new data centers for them in the coming years. What got investors really excited was the company’s forecast that its cloud infrastructure revenue would hit $144 billion by fiscal 2030, up from just $10.3 billion in fiscal 2025. It’s looking for cloud infrastructure revenue to increase by 77% to $18 billion this year, and then just continue to surge.

Below is a table of Oracle’s cloud infrastructure revenue projections.

Note: Oracle’s fiscal years end on May 31 of the calendar year.

Management said much of this revenue is already locked in: The company has $455 billion in remaining performance obligations (RPOs), with most of these contracts generally non-cancelable. That was a whopping 359% increase from a year ago when its RPOs were $99 billion, and up from just $138 billion a quarter ago. The huge increase was the result of Oracle signing four major contracts with three different customers in the quarter.

Oracle’s overall revenue increased 12% to $14.93 billion, which missed the $15.04 billion analyst consensus by less than 1%. Cloud revenue jumped 28% to $7.2 billion. Within the cloud segment, cloud infrastructure revenue soared by 55% to $3.3 billion while cloud application revenue rose 11% to $3.8 billion.

Adjusted earnings per share (EPS), meanwhile, rose 6% to $1.47. That came up just short of the $1.48 analyst consensus.

Looking ahead, Oracle maintained its forecast that its fiscal 2026 revenue will increase by 16% on a constant-currency basis. However, it upped its budget for capital expenditures to $35 billion from an earlier plan to spend just $25 billion. Management said most of those outlays will go toward things like graphics processing units (GPUs).

For its fiscal Q2, it guided for revenue to climb by between 14% and 16% year over year and for cloud revenue to soar by between 32% and 36%. It projected its adjusted EPS will rise by between 10% and 12% to a range of $1.61 to $1.65.

Is it too late to buy the stock?

Oracle’s projected cloud infrastructure growth over the next five years is nothing short of spectacular, and with contracts locked in, it has a clear line of sight into its future finances. However, it is worth noting that it will have to spend a lot of money to increase capacity so that it can meet these commitments, and it isn’t in as good financial shape as the big three cloud infrastructure providers.

Oracle currently has more than $80 billion in debt on its books, and it didn’t generate any free cash flow in the past year or in Q1, as it has been pouring all of its operating cash flow into expanding its data center capacity. Its cash flow from operations was $20.8 billion last year and $8.1 billion in Q1, so it likely will have to go further into debt over the next five years to build more data centers. That’s a sharp contrast to the financial situations of the big three cloud computing providers.

From a valuation perspective, Oracle now trades at a forward P/E of about 50 based on analysts’ estimates for its fiscal 2026, so it’s not cheap.

Given Oracle’s valuation, the state of its balance sheet, and the volume of capital expenditures in its future, I wouldn’t chase the stock after its huge surge.

Oracle (ORCL 35.96%) lit up after-hours trading on Sept. 9 after reporting a massive jump in its booked work tied to cloud infrastructure. The database giant turned cloud platform is benefiting directly from the artificial intelligence (AI) buildout, but in a way that provides unusually clear visibility into future revenue.

Nvidia (NVDA 3.91%) is still the face of AI infrastructure and continues to post eye-popping results. But the paths these two companies are on are different. Oracle’s growth is increasingly anchored by multiyear contracts that companies recognize as revenue over time, while Nvidia’s revenue depends on hardware shipments that ebb and flow with product transitions and customer ordering patterns. That’s why, from here, Oracle looks like the better buy.

Image source: Getty Images.

Oracle’s cloud business is exploding

Start with the backlog. Oracle’s remaining performance obligations (RPO) — a leading indicator of revenue tied to signed contracts–surged to $455 billion (yes, you read that figure correctly) in the quarter ended Aug. 31, up 359% year over year. Management said it signed “four multibillion-dollar contracts with three different customers” in the quarter, and expects RPO to exceed half a trillion dollars in the coming months. Cloud revenue rose 28% and infrastructure-as-a-service (IaaS) revenue jumped 55%.

This isn’t a one-off headline. RPO was $138 billion just last quarter, so the step-function increase reflects a wave of very large, multi-year deals landing at once. That’s the kind of demand AI leaders want to see — and it turns into revenue progressively over time, which typically smooths results compared to one-time hardware shipments.

Oracle also raised the bar on its cloud infrastructure outlook. CEO Safra Catz previewed a plan to grow Oracle Cloud Infrastructure (OCI) revenue 77% this fiscal year to $18 billion and then scale it to $32 billion, $73 billion, $114 billion, and $144 billion over the subsequent four years–much of which is already embedded in RPO. The company highlighted blistering multicloud momentum as well: “MultiCloud database revenue from Amazon, Google and Microsoft grew at the incredible rate of 1,529% in Q1,” with 37 more data centers slated for delivery to hyperscaler partners (71 in total). Oracle even declared another $0.50 quarterly dividend, underscoring confidence and cash generation.

Nvidia’s AI engine is phenomenal, but more cyclical

Nvidia‘s latest results remain exceptional: In the quarter ended July 27, revenue rose 56% year over year to $46.7 billion, with data-center revenue up 56% to $41.1 billion. Blackwell revenue grew 17% sequentially, and the company guided next quarter’s revenue to about $54 billion. None of that is weak.

But look under the hood, and you see dynamics that can swing. Sequential compute revenue dipped 1% because of a $4.0 billion reduction in sales of H20 products, and there were no H20 sales to China in the quarter. Inventory climbed to $15.0 billion to support the next product ramp, and purchase commitments reached $45.8 billion as Nvidia lines up capacity for future cycles. This is what a world-class hardware franchise looks like — powerful, but still subject to product transitions, export rules, and hyperscaler ordering patterns.

That’s the key contrast. Oracle’s growth is increasingly contract-based and recognized over time, with RPO providing a multi-year line of sight. Nvidia’s growth, while extraordinary, is inherently linked to hardware cycles and customers’ deployment timing. For portfolio construction, those differences matter.

Pulling it together, Oracle offers investors a clearer runway tied to contractual obligations, accelerating multicloud distribution with the biggest platforms in tech, and a growing dividend — all while still being earlier in its AI cloud build-out than Nvidia is in AI silicon. Nvidia will likely continue to compound value, but the path can be choppier as architectures evolve and regional rules shift. For investors choosing one AI leader to buy today, Oracle’s visibility and mix of growth and durability make it the better buy.