Oracle (ORCL) shares have surged over 20% in 2025 so far, closing at an all-time high of $199.86 on Thursday. This marks a sharp upward trajectory for the enterprise software giant, which has transformed itself into a major player in the cloud and AI infrastructure space. Meanwhile, in pre-market trading on Friday, the stock slipped two points, falling from $199.86 to $197.58. What exactly is driving this rally? Here is a quick breakdown:
Bullish revenue forecast for fiscal 2026
Oracle revised its annual revenue forecast upward to at least $67 billion for fiscal year 2026. This implies a 16.7% year-on-year growth, compared to its earlier projection of 15%. The optimistic outlook sent shares soaring over 13% on Thursday, making Oracle the top gainer on the S&P 500 for the day.
Remarkable growth in cloud and AI infrastructure
One of the key drivers of this surge is Oracle’s Cloud Infrastructure (OCI) business, which saw revenue grow 52% year-over-year to $3 billion. The company expects OCI growth to exceed 70% in fiscal 2026, reflecting booming demand from companies building AI models and data-intensive applications. Oracle’s credibility in the AI race got a boost earlier this year when it announced a joint venture with OpenAI, called Stargate, aimed at delivering large-scale computing capabilities. This partnership has positioned Oracle as a serious contender in the cloud-based AI infrastructure market, putting it in direct competition with AWS, Google Cloud, and Microsoft Azure.
Solid financial performance
In its latest earnings, Oracle reported overall revenue of $15.90 billion, beating Wall Street estimates of $15.59 billion. Cloud services revenue alone rose 14% to $11.70 billion. Following the upbeat results, at least nine brokerages raised their price targets for Oracle. Deutsche Bank and KeyBanc were among the firms that expressed strong confidence in the stock’s upward trajectory. Despite geopolitical uncertainties and looming tariff threats from U.S. president Donald Trump, investor confidence in software and AI-related stocks remains robust. Oracle has benefited from this sentiment, adding nearly 6% earlier this year before the post-earnings rally pushed it over 20% in 2025.