Oracle stock posts best week since 2001 amid surging cloud and AI demand

Oracle wrapped up its best trading week in over two decades, backed by strong earnings, a bullish cloud computing forecast, and growing investor confidence in its role powering the AI boom.

The stock surged 24% for the week, its largest weekly gain since April 2001, closing Friday at a record $215.22. The bulk of the rally came after Oracle’s earnings report late Wednesday, which exceeded Wall Street expectations and fueled optimism around its cloud infrastructure business.

The last time Oracle saw such a dramatic weekly rise was in the thick of the dot-com crash, when market rebounds were often short-lived. This time, however, analysts say the rally is built on solid footing.

“Oracle is in the enviable position of having more demand than it can fulfill,” wrote Argus Research analyst Joseph Bonner, who raised his price target on the stock from $200 to $235.

Cloud and AI momentum

Once considered a laggard in the cloud race behind Amazon, Microsoft, and Google, Oracle has found a lucrative niche: serving clients with massive needs for generative AI infrastructure. CEO Safra Catz told investors that revenue for the current fiscal year is expected to exceed $67 billion, well above analyst estimates.

Chairman Larry Ellison highlighted the scale of Oracle’s ambitions during the earnings call: “The demand is astronomical. But we have to do this methodically. The reason demand continues to outstrip supply is we can only build these data centers, build these computers, so fast.”

Oracle’s cloud clients now include some of the heaviest users of AI compute power, such as Meta, OpenAI, and Elon Musk’s xAI, all of whom rely on high-end Nvidia GPUs to train and deploy AI models. The company also announced partnerships with startups Baseten, Physical Intelligence, and Vast Data.

Investing big to compete

Oracle is pouring resources into infrastructure at an unprecedented pace. In fiscal 2025, capital expenditures topped $21 billion — more than its total capex from 2019 through 2024. Spending is expected to rise to $25 billion in fiscal 2026.

By comparison, Microsoft plans to spend $80 billion on capex this fiscal year, while Google is targeting $75 billion. Still, Ellison claimed Oracle intends to “build and operate more cloud infrastructure data centers than all of our cloud infrastructure competitors combined.”

Though Oracle trails its larger rivals in total cloud market share, the company is winning praise for its focused, high-performance offerings tailored to generative AI workloads.

Wall Street cheers

Investors appear to be buying the narrative. Oracle shares are up 29% year-to-date, far outpacing the Nasdaq’s modest 1% gain. Among mega-cap tech stocks, only Meta has come close with a 17% increase.

While Oracle still has work to do to catch up with its cloud rivals in scale, the company’s rapid growth and strategic positioning in AI suggest its latest rally is more than just a bounce. It may signal a new phase of relevance in the cloud era.