Key Points
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Oracle is already withing striking distance of joining the trillion-dollar club.
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Its AI cloud infrastructure business is a key growth driver that could enable to to reach a $1 trillion market cap.
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However, the company faces several potential obstacles, including its steep valuation.
- 10 stocks we like better than Oracle ›
What do the following stocks have in common: Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Meta Platforms (NASDAQ: META), Broadcom (NASDAQ: AVGO), Taiwan Semiconductor Manufacturing (NYSE: TSM) and Tesla (NASDAQ: TSLA)? Two things stand out. They’re all key players in the artificial intelligence (AI) space. They also all have market caps of over $1 trillion.
It might not be long before we can add another stock to the list. I predict a tenth AI giant could be the next trillion-dollar giant.
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Within striking distance
Oracle (NYSE: ORCL) is already within striking distance of becoming a member of the trillion-dollar club. Its market cap currently hovers around $790 billion.
This stock has been a huge winner in 2025, with an impressive year-to-date gain approaching 70%. That’s a better performance than all of the AI stocks that are bigger than Oracle.
If you take a glance at Oracle’s financial results, you might wonder why its stock is enjoying such tremendous momentum. The database, application software, and cloud services company’s revenue increased by 11% year over year in each of its two most recent quarters. Oracle’s earnings rose 9% year over year in the quarter ending May 31, 2025, and were flat in the quarter ending Aug. 31, 2025. Those aren’t the kind of numbers that would typically provide a big catalyst.
What has spurred investors’ excitement about this longtime tech leader? The growth of the company’s AI cloud business. Oracle has landed multibillion-dollar deals with Meta and ChatGPT creator OpenAI. It’s raking in big bucks from multicloud database partnerships with Amazon, Google and Microsoft. The company’s cloud infrastructure revenue soared 55% year over year in its most recent quarter.
How Oracle could reach $1 trillion
Oracle’s market cap needs to rise another 26% or so to reach $1 trillion. How can the company achieve this goal? We’ve already touched on two key ways.
Probably the most important thing Oracle needs to do is continue delivering strong growth with its AI cloud infrastructure business. The company has thus far done an admirable job at positioning itself as a cost-effective alternative to the huge AI hyperscalers. If it can sustain this momentum, joining the trillion-dollar club will be a much easier task.
The good news is that Oracle is confident about its cloud infrastructure prospects. Management recently projected that the unit will generate $166 billion in revenue by fiscal 2030. That translates to a compound annual growth rate of 75% over the next five years.
Image source: Getty Images.
Oracle’s multicloud database deals present another important growth driver. The company’s “coopetition” strategy with Amazon Web Services (AWS), Microsoft Azure, and Google Cloud appears to be working well.
Another key way for Oracle to grow is to make its core products even stickier for customers by integrating AI into them. In particular, incorporating agentic AI in its database and applications software platforms could be a winning approach.
What could get in the way
As you might imagine, several obstacles could prevent Oracle from attaining a market cap of $1 trillion anytime soon. I think three especially stand out.
First, some industry observers believe the demand for AI infrastructure will slow significantly. They look at the numbers behind the current boom and think we’re seeing a bubble that could soon burst. Oracle’s business would be hit hard if these fears come to pass.
Second, an economic downturn could be on the horizon. While some stocks can defy the downward pull during such turbulent periods, highfliers like Oracle probably wouldn’t.
Third, Oracle’s valuation could become a problem even if AI infrastructure demand and the broader economy hold up well. The stock’s forward price-to-earnings ratio tops 42. That’s higher than the multiples of all the current AI members of the trillion-dollar club except Tesla. Oracle’s bid to join their ranks could take much longer than its shareholders hope if the company can’t deliver sufficient growth to justify its nosebleed premium.
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Keith Speights has positions in Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Oracle, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.