Oracle’s (ORCL) stock has shown strong momentum recently, climbing 27% over the past two weeks. This significant rally has been fueled primarily by two major positive catalysts.
First, on July 30, Oracle announced an expanded partnership with Alphabet’s (GOOG) (GOOGL) Google. Under the agreement, Google’s advanced Gemini AI model will be integrated into Oracle’s AI Agent Studio. This means that customers using Oracle Cloud Infrastructure (OCI) will be able to leverage Google’s AI software to build and deploy AI agents—a move that significantly enhances Oracle’s product appeal in the artificial intelligence space.
OCI has become Oracle’s primary growth engine in recent years. In the just-concluded fiscal year 2026 (ended May 31), its cloud infrastructure revenue surged 77% to $18.1 billion, accounting for 27% of the company’s total revenue. A growing number of enterprises are utilizing its high-performance GPU clusters to support AI applications. Although OCI’s market scale remains far smaller than Amazon’s (AMZN) AWS, Microsoft’s (MSFT) Azure, and Google Cloud, its distinctive “multicloud” strategy—which allows enterprise customers to run workloads seamlessly across multiple cloud platforms, avoiding lock-in to a single ecosystem—has enabled it to integrate into the broader cloud ecosystem. The deepened collaboration with Google is an extension of this strategy, further expanding its visibility in the AI market.
The other catalyst came from Microsoft. On July 29, Microsoft released a strong earnings report, showing that its Azure cloud business surpassed $100 billion in annual revenue for the first time, while paid seats for Microsoft 365 Copilot exceeded 30 million. This signalled that the AI-driven demand fueling Oracle’s growth has not slowed. At the same time, expectations of easing macroeconomic headwinds have prompted more investors to return to high-growth technology stocks.
Looking ahead, the market is fairly optimistic about Oracle’s prospects. Analysts project that from fiscal 2026 to fiscal 2029, its revenue and earnings per share compound annual growth rates will reach 39% and 30%, respectively—quite impressive for a stock currently trading at roughly 22 times this year’s earnings. Growth in OCI, enterprise resource planning (ERP) services, and cloud database services is expected to effectively offset the continued decline in its traditional on-premises software business.
However, risks remain. Despite the stock being up over 40% this year, concerns persist over its surging capital expenditures, rising debt, and heavy reliance on a few high-growth AI companies such as OpenAI and Meta. That said, if its AI‑focused cloud ecosystem expansion strategy proves successful, the current heavy investments could yield substantial returns.
Notably, Michael Burry, the “Big Short” investor who famously predicted the 2008 financial crisis, has once again taken a bearish position on Oracle. On Thursday, he announced that he had re-established a short position in Oracle at $144.63 per share—just days after covering a related short position on Monday (August 5). Burry stated that the put options he previously held had generated considerable gains, but he might re-enter if market volatility declines. In addition, he disclosed another large short position in AI cloud infrastructure provider Nebius (NBIS), with a cost basis of $211.77 per share, explaining that he chose to short the stock directly rather than via options because option prices were “too high.”
Although Burry remains one of Wall Street’s most steadfast skeptics of the AI boom, warning that AI infrastructure investment is being driven by unsustainable financing, he also reiterated his bullish stance on several individual stocks, including Flutter Entertainment (FLUT), Fiserv (FISV), Zoetis (ZTS), and MercadoLibre (MELI). As of press time, related semiconductor ETFs, as well as Oracle and Nebius, were all trading higher in pre-market activity.
