Oracle came within a whisker of joining the exclusive $1 trillion club last year when its market cap briefly topped $940 billion, but its valuation has since tumbled to around $480 billion following a 49% collapse in its stock price. The tech giant's Oracle Cloud Infrastructure revenue soared 84% in recent quarter, fueled by AI development needs as AI developers rushed to access Oracle's industry-leading data center capabilities.
Some of the AI industry's top players are lining up to access Oracle's data centers, including OpenAI, Meta Platforms, and Elon Musk's xAI. Oracle generated $17.2 billion in total revenue during its fiscal 2026 third quarter, which was a 17% increase from the year-ago period, but revenue from the Oracle Cloud Infrastructure segment rocketed higher by 84% to a record $4.9 billion.
With a backlog of $553 billion in remaining performance obligations, Oracle is struggling to build data centers fast enough to meet surging demand. However, Oracle is struggling to build data centers quickly enough to meet demand, resulting in a backlog of $553 billion in remaining performance obligations - more than quadruple the year-ago figure. A concerning portion of this backlog, around $300 billion, is attributed to a single customer, ChatGPT creator OpenAI, which is a money-losing startup.
Currently, 12 companies boast market caps over $1 trillion, reflecting significant investor trust. For some perspective, Oracle's earnings grew by 17% during fiscal 2025, and they are on track to grow by a further 32% in fiscal 2026, but if a trip to the $1 trillion club is in the cards, it could take a few years. Oracle stock looks attractive at the current level, but can Oracle stock turn around from here and stage another run to the $1 trillion club?
