By Noel Randewich and Lewis Krauskopf
(Reuters) -Wall Street’s “AI trade” has propelled the market to record highs this year, and Oracle’s stunning share-price gains are giving investors another reason to back the trade.
Oracle shares jumped 36% on Wednesday after the company pointed to a demand surge from AI firms for its cloud services. The surge lifted its market value to $922 billion, leapfrogging the values of Eli Lilly LLY.N, JPMorgan Chase JPM.N and Walmart WMT.N.
Gains this year for Oracle, Broadcom, Palantir and other tech companies illustrate how AI has dominated markets, despite occasional pullbacks related to concerns about the rally becoming overheated.
Meanwhile, the “Magnificent Seven” megacap trade that led stocks higher for much of this bull market has stumbled somewhat this year as shares of Apple and Tesla have skidded.
“When people were beginning to get a little bit concerned about the AI and its related infrastructure growth slowing down a bit, Oracle comes out with a number that just surprises everybody and fuels the fire of that whole subgroup,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “This is a sign of the overall AI trade once again getting in the driver’s seat as far as equity markets are concerned.”
Oracle is now one of Wall Street’s 10 most valuable companies. Nearly all of these are viewed as leaders in AI, including Nvidia, Microsoft, Alphabet and Amazon.
AI chip heavyweight Nvidia this year became the world’s most valuable company in history, displacing Microsoft and iPhone seller Apple, which many investors view as straggling in the race to dominate emerging AI technology.
Nvidia’s stock price has dipped about 2% since it gave an uninspiring sales forecast on August 27, but its stock market value remained at $4.3 trillion as of Wednesday’s close.
Meanwhile tech shares have steadied after wobbling last month when investors pointed to signs of emerging caution related to the AI trade. The technology sector is up more than 16% so far in 2025.
Oracle’s $922 billion stock market value following Wednesday’s surge was just behind Berkshire Hathaway’s, $1.06 trillion, which trails Tesla’s $1.12 trillion.
Oracle unveiled four multi-billion-dollar contracts on Tuesday, taking advantage of an industry-wide shift led by companies such as OpenAI and xAI, to aggressively spend to secure the massive computing capacity needed in the AI race.
The U.S. stock market’s eight most valuable AI-related companies, including Oracle and chipmaker Broadcom, now make up almost 30% of the S&P 500.