Right now, the six most valuable technology companies in the world as measured by market capitalization are:
- Apple: $3.2 trillion
- Nvidia: $2.9 trillion
- Microsoft: $2.9 trillion
- Amazon: $2.1 trillion
- Alphabet: $2.0 trillion
- Meta Platforms: $1.6 trillion
Outside of these tech behemoths, chip leaders Taiwan Semiconductor Manufacturing and Broadcom, as well as electric vehicle (EV) manufacturer Tesla, are all within a 15% move of achieving a trillion-dollar valuation. What's notable about these three specific companies is that each once boasted a valuation north of $1 trillion but recently fell out of the club during the ongoing market sell-off.
The next largest mainstream artificial intelligence (AI) company outside of big tech is Oracle (ORCL +3.07%), which currently boasts a market cap of $435 billion. Over the last three years, Oracle stock has generated a total return of 98% -- about threefold the gains witnessed across both the S&P 500 and Nasdaq Composite.
With AI representing the company's newest tailwind, I see Oracle earning a ticket to the trillion-dollar club by the end of the decade. Let's explore what's behind Oracle's rapid ascent and assess why I think the company can keep up its market-beating gains.
NYSE: ORCL
Key Data Points
What is driving Oracle's growth?
Oracle reports its revenue across four categories: cloud services and license support, cloud license and on-premise license, hardware, and services. Among these four buckets, the cloud services and license support comprise roughly three-quarters of the company's sales. In addition, it is the only part of the business that is actually growing.
While these dynamics might lend themselves to a pessimistic narrative at first glance, I think Oracle is making some savvy moves on the AI front that should eventually cannibalize the deceleration seen in the on-premise segment and low-margin businesses such as hardware and services.
According to the company's fiscal third-quarter 2025 results (period ended Feb. 28), Oracle's fastest-growing business is its cloud infrastructure unit -- dubbed infrastructure-as-a-service (IaaS). Per the fiscal third quarter report, sales from the IaaS rose 51% year over year in constant currency to $2.7 billion. While growth of this magnitude is impressive, cloud infrastructure only comprised about 20% of the company's total revenue for the quarter. Below, I'll detail why I think the company's IaaS division is poised to take off considerably over the next several years.
One of the core services driving Oracle right now is building clusters of graphics processing units (GPUs) inside data centers. The company works closely with GPU leaders Nvidia and Advanced Micro Devices and subsequently rents out this infrastructure.
Just this year alone, cloud hyperscalers Microsoft, Amazon, and Alphabet, as well as emerging AI developer Meta Platforms, are forecast to spend over $300 billion on AI infrastructure -- much of which will be concentrated on chipsets and data center buildouts. On top of this, many leading AI businesses, including OpenAI and SoftBank, are participating in a multiyear $500 billion AI infrastructure initiative under President Trump, known as Project Stargate.
Considering Oracle already works with Meta and the three major cloud hyperscalers, and management specifically referred to Project Stargate during the most recent earnings call, I'm optimistic that rising Oracle stands to capture a portion of this rising capital expenditure (capex) investment by big tech -- thereby fueling significantly more growth in its IaaS division over the next several years.
Image source: Getty Images.
Can Oracle achieve a trillion-dollar valuation?
In order to achieve a trillion-dollar valuation, Oracle's market cap would need to rise by a tad more than twofold over the next five years.
ORCL Revenue Estimates for Current Fiscal Year data by YCharts
According to the estimates above, Wall Street analysts are expecting Oracle's revenue to reach $77 billion by 2027 -- accelerating to a top-line growth rate of 18% from 14% between 2025 and 2026. If I assume Oracle's revenue does not continue accelerating and the company maintains annual sales growth of 18%, then the company will reach total revenue of roughly $108 billion by 2029.
From there, if I apply Oracle's current price-to-sales (P/S) multiple of 8 to my 2029 projected revenue, then I'll arrive at a market cap of $864 billion. Clearly, this is shy of $1 trillion.
Just to illustrate the analysis from a mathematical perspective, if Oracle's revenue reaches 20% annual growth by 2029 and its P/S multiple rises to 9, then the company would be sitting on the doorstep of a $1 trillion market cap. I think this is doable.
The secular tailwinds explored above underscore rising investment in AI infrastructure over the next several years. This should help Oracle continue accelerating its sales growth as opposed to maintaining steady growth through the end of the decade -- especially as new GPU architectures from Nvidia, AMD, and the hyperscalers enter the market.
Over time, I think investors will begin to apply a premium multiple to Oracle as its IaaS segment becomes the focal point of the business -- thereby expanding the company's valuation to $1 trillion.
