The impact of artificial intelligence (AI) on the technology landscape has been incontrovertible over the past few years, but the transformation is ongoing. Indeed, a review of the world's most valuable companies by market cap offers up compelling insight: Eight of the top 10 companies boast membership in the $1 trillion club, and they all have unmistakable ties to AI.
Some of the most important players in the semiconductor and information technology (IT) spaces have taken up residence on the list. For example, Nvidia pioneered the graphics processing units (GPUs) that power the technology, Taiwan Semiconductor Manufacturing produces roughly 90% of the world's most advanced semiconductors, and Broadcom is a critical part of the AI ecosystem, with 99% of all internet traffic passing through its equipment.
With a market cap of $705 billion, it seems like it's only a matter of time before Oracle (ORCL 3.75%) secures its membership in this elite fraternity. The company's growth is accelerating, and management's long-term outlook provides compelling evidence that AI will fuel robust growth for years to come.
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Oracle notes that roughly 98% of Global Fortune 500 companies are among its customers, using a combination of its database, cloud, and enterprise software products and services. This gives Oracle a captive audience for its expanding suite of AI and cloud solutions.
This has helped propel the company's recent growth spurt. During Oracle's fiscal 2025 fourth quarter (ended May 31), revenue grew 11% year over year to $15.9 billion, while adjusted earnings per share (EPS) of $1.70 grew 4%. Both numbers easily surpassed Wall Street's consensus estimates, which called for revenue of $15.6 billion and adjusted EPS of $1.64.
CEO Safra Catz noted that the company had reached a "tipping point," with revenue growth accelerating, "and it's only going up from here." She also said she expects cloud revenue for the coming year to accelerate to 40% in fiscal 2026, up from 24%, and far outpace the growth of its larger cloud rivals.
This is driving the expansion of the company's remaining performance obligation (RPO) -- or contractual obligations not yet included in revenue -- which surged 41% year over year to $138 billion. The fact that RPO is growing faster than revenue provides a glimpse into the future. Perhaps even more telling is Catz's statement that "RPO is likely to grow more than 100% in fiscal year 2026." At the same time, Oracle expects its revenue to top $67 billion next fiscal year, which would represent 16% growth in constant currency.
NYSE: ORCL
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The clear path to $1 trillion
Oracle has a sterling reputation for helping its clients pick the appropriate cloud and AI solutions for their needs. This puts the company in the pole position to benefit from the growing adoption of generative AI. Given the sheer magnitude of the opportunity, this transition will take years, if not decades, to unfold.
According to Wall Street, Oracle is expected to generate revenue of $66.8 billion in its fiscal 2026 (which began June 1), giving it a forward price-to-sales (P/S) ratio of about 11. Assuming its P/S remains constant, Oracle would need to generate revenue of approximately $95 billion annually to support a $1 trillion market cap. Analysts are forecasting revenue growth of nearly 18% annually over the coming three years. If the company achieves these targets, Oracle could achieve a $1 trillion market cap by 2028.
Wall Street's forecast appears to be in lockstep with management's long-term outlook, which is guiding for revenue of at least $104 billion by fiscal 2029.
Estimates regarding the market value of generative AI are all over the map, but bear watching. Big Four accounting firm PwC estimates the market could be worth as much as $15.7 trillion annually by 2030, which helps illustrate the magnitude of the opportunity.
If Oracle can carve out just a sliver of that windfall by serving up appropriate AI solutions to its customers, its impressive growth will continue, helping Oracle join the fraternity of trillionaires sooner rather than later.
