Oracle Corporation (ORCL) lives up to its name meaning the great ability to foresee global trends of the future. Just like a renowned ancient Greek oracle of Delphi with its priestess Pythia, who used to choose the best option of what to do in the face of uncertainty, this Oracle of Austin, Texas, made a timely bet on developing cloud computing software, which now perfectly fits to creation and scaling of data centers both in the U.S. and abroad. And now when Oracle became a pillar of a $500 billion cost data centres infrastructure project Stargate, in conjunction with ChatGPT-maker OpenAI and Japan’s SoftBank, which we already described three months ago, Oracle has already begun to reap a lot of financial benefits. Not only fate and global tailwinds, but also the current Republican administration of the U.S. favours this project, sparing no effort to support it, as they are considering the growing AI infrastructure as the next oil of the world's economy.

Power-hungry data center demand, which provides computing power for artificial intelligence and the crypto industry is pushing national power use to record highs, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook this month. It projected power demand to rise to 4,193 billion kilowatt hours (kWh) in 2025 and 4,283 billion kWh in 2026 from a current record of 4,097 billion kWh in 2024.

Not in some distant future, but here and now, Oracle market value gained as much as 22% during the last three trading sessions on Wall Street, jumping from a $175+ area to its highest ever weekly close above $215 per share last Friday. This happened on the wings of all-time records in its earnings report. On the night of June 11-12, the company's revenue for the quarter ended May 31 climbed to $15.90 billion to beat even a very optimistic analyst pool’s average estimate of $15.59 billion. It is especially remarkable that the sales number at Oracle’s largest unit, which is related to cloud services and license support, came out at $11.70 billion, bringing another 14% increase YoY. On this basis, Oracle earned $1.70 per share, compared with consensus expectations of $1.64, with $1.67 per share being its previous best achievement from March to May 2023.

But it is not only what has already been achieved that attracts the attention of the investing crowd. It was not the Pythia but Oracle's CEO Safra Catz who said on a post-earnings call that her company projected its total revenue to be at least $67 billion for fiscal 2026, raised her own previous annual revenue forecast due to robust demand for Oracle's cloud offerings from companies deploying artificial intelligence (AI) agenda. The Greek oracle was consulted on a wide range of matters, from personal issues to affairs of business and state, and the Pythia's pronouncements were influential throughout the entire ancient world. In nearly the same way, the AI is now the major adviser in which countless marketing departments of giant, medium and small companies see a panacea for multiplying the sales of their products and services while reducing the costs of these purposes. Oracle's annual sales are expected to rise by around 16.7%, compared with its prior official projection of a 15% growth, according to Safra Catz, as she expected Oracle's total cloud growth rate (applications plus infrastructure) could increase from 24% in fiscal year 2025 to over 40% in fiscal year 2026.

We had been targeting above $200 for the stock since the first half of March, following the financials at that time. Now, in mid-June, that target is overshot, thanks to the very latest quarterly report. Investors wishing to fix profits are free to do so, as the speed of the recent price jump for Oracle substantially exceeds the usual market standards. Some cooling pullback from levels above $215 to $200 or even slightly lower cannot be ruled out in the short-term, but medium-term targets now seemingly need to be shifted to at least $250, and this could be achieved within the coming months of 2025, rather than next year.