Oracle Corporation saw its shares rise 2.1% to $159.87 in after-hours trading Tuesday, after reaching an intraday peak of $165.32. The move comes as the software giant continues to position itself at the center of the artificial intelligence infrastructure race.
Investors are grappling with volatility in the software sector, where fears persist that generative AI could undermine the pricing power of established providers. JPMorgan strategists noted the market is pricing in worst-case disruption scenarios, while Morgan Stanley suggested the valuation gap is sentiment-driven rather than fundamental.
On Tuesday, Oracle introduced new AI automation capabilities for its Fusion Cloud business suite, specifically targeting supply chain and manufacturing operations. The company emphasized these tools help organizations manage increasingly complex and disruption-prone supply networks.
Oracle's ambitious expansion plans are drawing significant attention. The company recently disclosed intentions to raise between $45 billion and $50 billion in 2026 to fund cloud infrastructure growth. Approximately half of this amount is expected to come from equity and equity-linked instruments, including an at-the-market program that could involve selling up to $20 billion in stock over time.
Analyst sentiment remains mixed. Melius Research downgraded Oracle to "hold" from "buy" this week, maintaining a $160 price target while citing concerns about cash generation and rising competition from AI-focused firms like OpenAI, Anthropic, and Google.
The company faces substantial execution risks as it builds out data centers to meet demand from major cloud clients, including AMD, Meta, Nvidia, OpenAI, TikTok, and xAI. Oracle must also compete against deep-pocketed rivals like Amazon Web Services, Microsoft Azure, and Google Cloud, which have greater financial resources and patience for long-term returns.
Market attention now shifts to upcoming economic data, including the delayed U.S. payrolls report and consumer price index reading, which could influence interest rate expectations and impact technology valuations. For Oracle, the key question is whether its recent rebound can be sustained as investors look for concrete evidence that AI-driven cloud demand translates into meaningful revenue growth.
