After gaining a staggering 36% on Sept. 10, Oracle (ORCL -7.28%) has practically doubled in 2025 and is up more than 470% in the last five years.
Oracle's rapid rise proves why it's time to forget about the "Magnificent Seven" and focus instead on the "Ten Titans," which is the Magnificent Seven (Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta Platforms, and Tesla) plus Broadcom, Oracle, and Netflix. The Magnificent Seven still has value, but it is incomplete without the hottest artificial intelligence (AI) stock -- Oracle.
Here are three reasons why Oracle is knocking on the door of $1 trillion in market cap, and if the growth stock is a buy now.
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1. Oracle justified its high spending and leverage
In just a few years, Oracle transformed from a stodgy, moderate-growth database services company to a rapidly growing cloud infrastructure-as-a-service and software-as-a-service company. Oracle is pouring capital expenditures (capex) into expanding its cloud build-out, and even taking on debt.
In its fourth-quarter fiscal 2025 earnings report from June, Oracle said that it had 23 multicloud data centers, with 47 more being built over the next 12 months -- so nearly one data center per week.
Since Oracle is spending so much on infrastructure to tap into revenue it hasn't yet generated, the company's capex as a percentage of revenue has skyrocketed to 0.47. This means that the company's capex is nearly half its revenue. The closest major hyperscaler to that kind of leveraged capex spending is Meta Platforms at 0.35. The "big three" cloud giants -- Microsoft, Alphabet, and Amazon -- are all less than 0.24.
In its June earnings release, Oracle's CEO Safra Catz made a bold claim, saying that "Oracle is well on its way to being not only the world's largest cloud application company -- but also one of the world's largest cloud infrastructure companies." This means it would take market share from the other major cloud infrastructure companies in Amazon Web Services, Microsoft Azure, and Alphabet-owned Google Cloud.
Catz also said that Oracle was expecting total cloud growth, (applications plus infrastructure) to increase from 24% in fiscal 2025 to more than 40% in fiscal 2026, with cloud infrastructure growing from 50% in fiscal 2025 to 70% in fiscal 2026.
Spending big, taking on leverage, and establishing lofty targets is a risky move, but it can pay off big time. On Sept. 9, Oracle delivered excellent results and guidance for 77% revenue growth from Oracle Cloud Infrastructure (OCI) in fiscal 2026, which was ahead of its prior target. If Oracle hits that 77% number, OCI revenue would reach $18 billion in fiscal 2026. Oracle stock's 36% pop on Sept. 10 was a resounding stamp of approval from Wall Street to grow as fast as possible, even if it comes at a high price.
NYSE: ORCL
Key Data Points
2. Oracle penetrated the cloud infrastructure moat
Oracle's results and near-term guidance weren't even the best part of its earnings sprint. Rather, it was the company's long-term term guidance.
Oracle could have taken a victory lap and forecast more moderate growth. But it did the opposite, forecasting it would accelerate its momentum by generating a staggering $32 billion in OCI revenue in fiscal 2027, $73 billion in fiscal 2028, $114 billion in fiscal 2029, and $144 billion in fiscal 2030.
To put these figures into context, consider that Oracle's entire business, which includes cloud services and license support, cloud licenses and on-premises licenses, hardware, and other services, generated $57.4 billion in fiscal 2025 revenue.
3. Oracle is filling a need in the market
Oracle is winning business by providing a cloud offering unlike any other. The company's pricing model is affordable and ideally suited for customers who already use its database services. Oracle also works with AWS, Microsoft Azure, and Google Cloud as third-party cloud partners. The OCI multiyear forecast is basically saying that Oracle will grow its multicloud offering and its OCI-specific data centers -- giving Oracle two levers to pull to accelerate its cloud expansion.
Oracle's fiscal 2030 OCI revenue forecast isn't a far-fetched number based on hope alone. In its latest quarter, Oracle signed four multibillion-dollar contracts with three different customers -- bringing its remaining performance obligation (RPO) contract backlog to $455 billion -- a 359% increase. RPO is basically orders that customers have booked, but that Oracle has not yet filled. And it's worth mentioning that this $455 billion number is greater than the cumulative OCI revenue forecast from fiscal 2026 through fiscal 2030.
On Sept. 10, reports surfaced that Oracle landed a $300 billion contract from OpenAI that would start in 2027 and run for about five years. OpenAI already works with Oracle, so the company's decision to book a record cloud contract with Oracle is a sign that OCI can hold its own, even with the big three cloud providers.
Some form of Oracle's integrated cloud, database, and enterprise software is used by 98% of Fortune 500 companies, showing that many top companies have an existing relationship with Oracle. That's a great sign that more and more companies may be interested in bundling Oracle services instead of spreading out their business with multiple cloud and software providers.
Oracle has set the table
Oracle's blowout quarter and guidance showcase why it is the hottest AI growth stock to buy in 2026. It also pokes a hole in the seemingly impenetrable cloud infrastructure fortress dominated by the big three. And finally, it also puts pressure on pure-play software-as-a-service companies -- hence why Salesforce sold off following Oracle's results.
Oracle is unique because it is an infrastructure software and enterprise software company that is purely business-to-business facing. Right now, Oracle's lack of diversification and leverage are its strengths, because that's what the market is into right now.
Investors who are willing to pay a premium price for Oracle may still want to buy and/or hold the stock now. However, it's worth noting that Oracle's same advantages could backfire if sentiment shifts. Leverage is a bad look when an industry is experiencing slowing growth or there's an economic downturn, which could also derail a forecast.
That said, what Oracle is doing as a business is nothing short of groundbreaking. And if it delivers on its fiscal 2030 forecast, the stock will likely be a lot higher.
All told, investors with a three-to-five-year time horizon who believe Oracle can fulfill its promises may still want to consider buying the stock, even after its recent run-up.
