Why Oracle Stock Zoomed 39.9% Higher in May
Written by Brett Schafer for The Motley Fool -> Oracle is rebounding alongside its key infrastructure partner, OpenAI. The company's AI revenue is growing quickly, but is still much smaller than that of other cloud players. Shares of Oracle (NYSE: ORCL) shot up 39.9% in May, a
Oracle is rebounding alongside its key infrastructure partner, OpenAI.
The company's AI revenue is growing quickly, but is still much smaller than that of other cloud players.
Shares of Oracle (NYSE: ORCL) shot up 39.9% in May, according to data from S&P Global Market Intelligence . After rising to over $300 a share last summer, Oracle's stock tumbled in the ensuing quarters, falling below $150 in April amid continued concerns about its partner, OpenAI, and its market-share struggles.
Since then, it has been all sunshines and rainbows for the enterprise software and database provider that is transitioning to a cloud infrastructure player for artificial intelligence ( AI ). Here's why Oracle stock made a comeback in May, and whether now is a good time to buy shares for your portfolio.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Known for decades as a provider of enterprise software and database solutions, Oracle has recently pivoted to become an infrastructure provider for AI companies, specifically OpenAI. Its cloud infrastructure revenue grew by 81% in constant currency last quarter to $4.9 billion, which is rapid growth but still well below that of other AI cloud players like Amazon.
OpenAI is a key partner with Oracle, contracting for a large chunk of the business's $553 billion in remaining performance obligations, which grew 325% year over year last quarter. With all these spending plans, investors were concerned about liquidity at OpenAI as it struggled against competitor Anthropic in early 2026.
This, in turn, spooked investors in Oracle, which is building data centers to help power OpenAI's systems. If OpenAI cancels these contracts, Oracle's business might be in trouble since it used massive amounts of debt to fund its infrastructure plans.
