Oracle (ORCL) shares jumped late Wednesday following a Bloomberg report that the tech giant is expanding its Stargate data center project with OpenAI. This comes just two days after Oracle revealed it had secured a cloud services deal expected to generate more than $30 billion annually starting in fiscal 2028, sparking a strong rally in Oracle’s stock.
According to Bloomberg’s anonymous sources, OpenAI—the creator of ChatGPT—will lease additional cloud computing capacity from Oracle, totaling about 4.5 gigawatts of data center power across the U.S. This deal is an expansion of the high-profile Stargate AI infrastructure project.
Oracle Chairman Larry Ellison appeared alongside OpenAI CEO Sam Altman and SoftBank CEO Masayoshi Son at the White House in January to announce Stargate. The initiative aims to invest up to $500 billion over five years to build AI-powered data centers, partnering with Nvidia (NVDA) and others. So far, the project has focused on a large data center in Texas, with new sites under review in Texas, Michigan, Wisconsin, and Wyoming, according to Bloomberg.
On Wednesday, Oracle stock gained 5%, closing at a record $229.98.
On Monday, Oracle CEO Safra Catz disclosed in a regulatory filing that Oracle has “signed multiple large cloud services agreements,” including one expected to contribute $30 billion in annual revenue starting in fiscal 2028 (Oracle’s fiscal year begins in June). The stock rose 4% to a record close on the news.
While Oracle did not name the client, Bloomberg reported Wednesday that the Stargate agreement likely represents at least part of this contract.
Guggenheim analyst John DiFucci noted in a client memo Monday: “Oracle has been clear the past two quarters that all of their provided guidance does not contemplate Stargate and only will if/when that contract is signed.” He added, “We struggle to think of another deal that could possibly be of the magnitude as the one referenced today, so in our minds this likely means the Stargate contract has been signed, but the company has not said that.”
D.A. Davidson analyst Gil Luria raised his price target for Oracle stock from 170 to 220 while maintaining a neutral rating. He pointed to TikTok parent ByteDance as another potential large customer, especially given recent reports that an investor group including Oracle is interested in acquiring TikTok’s U.S. operations.
“Oracle is actively expanding its data center campuses in Johor, Malaysia, a location that is widely acknowledged within the industry to predominantly support ByteDance,” Luria wrote. He noted that ByteDance is “one of the largest consumers of GPU capacity in the world to support their recommendation engines and internal AI research initiatives.”
After a challenging start to 2025, Oracle’s stock surged 32% in June to reach record highs. A strong Q4 fiscal earnings report helped boost Wall Street’s confidence in Oracle’s ability to capitalize on AI-driven cloud demand.
Oracle recently told investors it expects cloud infrastructure revenue to grow 70% in fiscal 2026, following $10.3 billion in cloud infrastructure revenue for fiscal 2025.
Pump Radar
Stock Alerts