Oracle: The Next AI Stock to Join the $1 Trillion Club Within 4 Years

Oracle Corporation (NYSE:ORCL) has been making waves in the tech industry, and its recent performance in the AI space has caught the attention of investors. With a market cap of just $457 billion, some may question whether Oracle can join the ranks of the $1 trillion club, which includes tech giants like Nvidia, Broadcom, Tesla, and others. However, Oracle's recent business performance and management's long-term outlook suggest that the company is well on its way to achieving this milestone within the next four years.

Oracle's AI offerings are a key driver of its growth. The company's Cloud Infrastructure (OCI) is a hot property right now, with GPU use climbing by 336% compared to the same period in fiscal 2024. Oracle's OCI will soon offer new clusters featuring over 131,000 of Nvidia's latest Blackwell GPUs, paving the way for the most advanced AI applications yet. Additionally, Oracle's AI connectivity revenue soared fourfold thanks to sales of its Tomahawk and Jericho data center switches, which regulate how quickly data travels between chips and devices, leading to substantial cost savings for AI developers.

Oracle's AI revenue surged by a whopping 220% to $12.2 billion in fiscal 2024, driven by strong demand for AI chips and networking equipment. The company's AI-focused acquisitions, such as VMware, have also expanded its AI capabilities and diversified its business. Oracle's recent financial results and guidance suggest that the company is well-positioned for continued growth in the AI space.



Oracle's growth opportunities in AI are vast. The market value of generative AI is projected to reach as much as $15.7 trillion annually by 2030, according to Big Four accounting firm PwC. If Oracle can capture just a fraction of this opportunity and continues serving up compelling AI solutions to its customer base, its growth spurt will continue for the rest of this decade, helping the company join the company of trillionaires in short order.



Oracle's strong financial performance and growth prospects have led analysts to forecast that the company could achieve a market cap of $1 trillion by 2032, assuming a constant price-to-sales (P/S) ratio of 8. However, management recently boosted its long-term outlook and is forecasting revenue of at least $104 billion by fiscal 2029, or a compound annual growth rate (CAGR) of greater than 16%. If Oracle achieves its internal guidance, it will likely reach a market cap of $1 trillion by 2031 -- or sooner.

In conclusion, Oracle's recent performance in the AI space, coupled with its strong financial results and management's long-term outlook, suggests that the company is well on its way to joining the $1 trillion club within the next four years. Investors who buy Oracle stock today could potentially earn a very nice return of 116% by the time the company reaches this milestone. However, it's essential to do your due diligence and not rely solely on this article as financial advice. Always apply independent thinking and consider seeking the advice of a financial professional before making investment decisions.