The U.S. economy has an incredible track record of producing some of the world’s most valuable companies. United States Steel became the first billion-dollar company in history in 1901, and 117 years later, in 2018, Apple became the first company in the world to reach a $1 trillion valuation.
Apple is now worth more than $3.7 trillion, and six other technology companies have joined its trillion-dollar club: Microsoft, Amazon, Alphabet, Meta Platforms, Tesla, and Nvidia. But I think another company will get members soon.
oracle (NYSE:ORCL) was founded in 1977 and has participated in almost every technological innovation since then. Today, the company is rapidly becoming the leader in artificial intelligence (AI) data center infrastructure, and its valuation could soar to $1 trillion within 10 years.
Oracle’s market cap currently stands at $492 billion, so investors who buy the company’s stock today could double their money if the company joins the $1 trillion club.
Oracle’s AI infrastructure is best in class
Large-scale language models (LLMs) are the foundation of all AI chatbots and software applications. Developers continue to build large-scale LLMs to make AI software “smarter,” but this is a very expensive endeavor and requires thousands of graphics processing units (GPUs). Requires a data center.
Nvidia supplies the world’s most powerful GPUs for AI development. The more data developers have access to, the more data LLM can ingest and process. Oracle Cloud Infrastructure (OCI) Supercluster technology allows developers to scale up to an industry-leading 65,000 Nvidia H200 GPUs.
But Oracle is going one step further. We are currently building a new cluster that will allow developers to use up to 131,000 of Nvidia’s latest Blackwell GPUs.
OCI’s Random Direct Memory Access (RDMA) technology is much faster than traditional Ethernet networks when moving data from one point to another. Most developers rent computing capacity by the minute, so faster processing can result in significant cost savings. That’s why Oracle attracts major AI startups like xAI, OpenAI, and Cohere.
Oracle announced that GPU usage increased 336% year-over-year during the second quarter of fiscal 2025 (ending October 31), demonstrating how rapidly demand for AI infrastructure is growing. It highlights the presence of animals. The company currently operates 98 data center regions and plans to build 1,000 to 2,000 more data centers in the long term to meet demand.
Oracle Cloud Infrastructure revenue growth is accelerating again
Oracle generated total revenue of $14.1 billion in the second quarter, up 9% year over year. But OCI’s revenue in particular soared 52% to a record $2.4 billion. This was the highest growth rate of the year and the second consecutive quarterly acceleration after a temporary dip.
Simply put, if more data centers were operational, OCI’s revenue would grow even faster. Even though the company is building them as quickly as possible, it is still struggling to meet demand.
This is one reason why Oracle’s remaining performance obligations (RPO) increased 50% year-over-year to $97 billion in the second quarter. RPO is like a backlog that should turn into revenue in the future once Oracle is able to deliver the agreed-upon services. CEO Safra Catz said RPO will continue to rise, citing Oracle’s recent deal with Meta Platforms.
Meta has developed the world’s most popular open source LLM called Llama, which has been downloaded over 600 million times to date. The company will move some of its training workloads to Oracle’s infrastructure, and the two companies will work together to build AI agents using Llama. This is a big win for Oracle, considering Llama 4 could be the most advanced model in the industry when it launches next year (according to Meta CEO Mark Zuckerberg).
Oracle’s (mathematical) path to the trillion dollar club
Oracle has generated $4.09 earnings per share (EPS) over the past four quarters and has a price-to-earnings ratio (P/E) of 43.4, based on the stock’s price of $177.74 at the time of writing. That’s not cheap considering the Nasdaq 100 Technology Index’s P/E ratio is just 33.9x.
However, Oracle increased its EPS by 24% in the second quarter, the fastest pace in nearly a year. The company’s data centers are highly automated, resulting in incredibly low operating costs and therefore high profit margins. As more companies come online, economies of scale should result in very strong growth in Oracle’s revenue.
Mathematically speaking, if Oracle grows its EPS by 7.3% annually, its market cap could exceed $1 trillion within 10 years (assuming the current P/E ratio remains constant). Given that the company plans to expand its data center footprint 10x in the coming years, we think the company’s EPS growth is more likely to accelerate rather than decelerate over the next decade.
So a 10-year window for Oracle to join the $1 trillion club is very conservative. If it can maintain at least 20% EPS growth, it could get there within four years.
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Suzanne Frey, an Alphabet executive, is a member of the Motley Fool’s board of directors. Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. Anthony Di Pizio has no position in any stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Oracle, and Tesla. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
