An enormous income pipeline has made this cloud computing big a really perfect candidate to affix the trillion-dollar market cap membership.
The fast development of synthetic intelligence (AI) prior to now three years has helped fairly a couple of firms enter the trillion-dollar market cap membership, together with Nvidia, Broadcom, and TSMC. The great half is that the proliferation of AI remains to be within the early levels.
Based on one estimate, the worldwide AI market is prone to clock a compound annual development fee of practically 36% via the top of the last decade. So, it will not be shocking to see this know-how assist extra firms enter the membership of firms with market caps above $1 trillion. I feel cloud big Oracle (ORCL -1.71%) would be the subsequent firm to realize a trillion-dollar market cap.
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AI has fueled a large bounce in Oracle’s income pipeline
Oracle inventory has jumped a powerful 88% in 2025 via Sept. 23 on the again of strong development in its income and earnings. It now has a market cap of virtually $877 billion, which implies that it’s simply 14% away from the $1 trillion milestone. This places Oracle in a really perfect place to change into the following AI-fueled trillion-dollar firm, particularly because it has a large backlog that is going to assist it speed up development.
Oracle has raised its fiscal 2026 income steering to a minimum of $67 billion, which might mark an enchancment of virtually 17% from the prior 12 months. That will be double the expansion fee that Oracle clocked within the earlier fiscal 12 months. Nonetheless, there’s a good likelihood of Oracle exceeding this forecast, contemplating the red-hot demand for the corporate’s knowledge facilities for working AI workloads.
The corporate’s Oracle Cloud Infrastructure (OCI) enterprise has obtained a large enhance as firms have been renting knowledge middle capability from Oracle for working AI fashions and constructing customized AI purposes. The truth that Oracle’s knowledge middle community is current worldwide, spanning greater than 50 geographic areas, is a key cause why it has been witnessing phenomenal demand.
OpenAI, as an example, can be paying Oracle a large $300 billion over a five-year interval for entry to its knowledge middle capability. Oracle ended the primary quarter of fiscal 2026 with a whopping $455 billion in remaining efficiency obligations (RPO), with the determine leaping by 359% from the year-ago quarter.
Oracle CEO Safra Catz mentioned in an organization press launch that the corporate expects over the following few months to “sign-up a number of extra multi-billion-dollar clients and RPO is prone to exceed half-a-trillion {dollars}.” All this places Oracle in a terrific place to extend its income estimates. Oracle’s large RPO — the entire worth of unfulfilled contracts on the finish of 1 / 4 — additionally explains why it’s anticipating OCI income to extend 77% in fiscal 2026 to $18 billion, adopted by an identical enhance the next 12 months to $32 billion.
The expansion fee is anticipated to speed up in fiscal 2028, with OCI income anticipated to greater than double to $73 billion, pushed by the addition of extra cloud computing capability. This excellent development within the firm’s OCI enterprise goes to play a central function in serving to Oracle obtain a trillion-dollar market cap.
The trillion-dollar milestone might arrive throughout the subsequent 12 months
Oracle has a median 12-month worth goal of $350, amongst 43 analysts masking the inventory that CNN is monitoring. That factors towards a possible bounce of 13% from present ranges, which must be practically sufficient to ship this cloud computing big into the trillion-dollar membership.
Nonetheless, traders can count on stronger positive aspects from the corporate. The inventory is presently buying and selling at 15 instances gross sales. Although that is costly when stacked up towards the U.S. know-how sector’s common gross sales a number of, the upper valuation is justified contemplating its enhancing development profile. If Oracle can maintain this gross sales a number of on the finish of the fiscal 12 months and finally ends up with $70 billion in income because of its large backlog, it might obtain a $1 trillion market cap.
So, traders searching for the following trillion-dollar firm ought to take into account including Oracle to their portfolios, and the corporate’s capacity to notch quicker development within the coming years might assist it change into a lot greater in the long term.
Harsh Chauhan has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Nvidia, Oracle, and Taiwan Semiconductor Manufacturing. The Motley Idiot recommends Broadcom. The Motley Idiot has a disclosure coverage.
