Oracle Trades Higher on Big AI Initiative

Oracle (NYSE:ORCL | ORCL Price Prediction) has rallied by more than 7% upon President Trump’s recently announced $500 billion AI infrastructure investment. The news has caused many AI stocks, like Oracle, to outpace the S&P 500 today. Thanks to this move, Oracle shares are now up by 11% year-to-date.

Oracle CEO Larry Ellison was with Trump when he made the announcement. Oracle’s CEO referred to it as a “very exciting program.”

What happened?

Many AI stocks leaped higher after Trump’s announcement, but Oracle’s gains have outpaced most of its competitors. That’s because Oracle is one of the three leading companies in the $500 billion joint venture. SoftBank and OpenAI are the other two companies that are a part of the joint venture.

Shortly before announcing the $500 billion AI infrastructure investment, President Trump revoked Biden’s executive order on AI risk. Deregulation will make it easier for companies to invest in AI and release innovative products into the marketplace.

These recent moves can also suggest further AI investments in the future. President Trump wants to compete with China on artificial intelligence. Many corporations are pouring billions of dollars into AI, so it’s possible that the United States will follow suit and further increase its AI investments in the future. 

Now what?

Artificial intelligence tailwinds are still strong and can continue to lift stocks higher. President Trump’s AI infrastructure investment and Oracle’s role in the project position it to perform well. Oracle is currently rated as a moderate buy with an average price target of $192.20/share, implying a 4% upside. The highest price target of $220 per share suggests a potential 19% gain.

Oracle has been delivering high-single-digit revenue while expanding its profit margins. The company’s cloud segment delivered 24% year-over-year revenue growth and stands to benefit the most from artificial intelligence. Corporate and government investments into AI suggest that Oracle’s revenue can accelerate in subsequent quarters.