Oracle (ORCL) stock is surging in Wednesday after President Donald Trump unveiled The Stargate Project, which will invest up to $500 billion to build artificial intelligence (AI) infrastructure in the United States over the next four years.
The Stargate Project is a new company formed and funded by Japanese investment firm SoftBank, OpenAI, Oracle and technology investment firm MGX.
"This infrastructure will secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefit for the entire world," said OpenAI in the press release. "This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The firms will begin by investing $100 billion "immediately," OpenAI said, with up to $400 billion being invested in the years to follow.
The first joint venture of The Stargate Project will be the construction of data centers in Texas, Oracle co-founder Larry Ellison said, according to CNBC.
"While investors have become increasingly concerned about peak compute demand, this should go a long way to quelling these concerns and potentially adding growth runway for" AI chipmakers, including Nvidia (NVDA) beyond calendar year 2026, says UBS Global Research analyst Timothy Arcuri.
Arcuri adds that while details are thin at the moment, it "sounds like the project will at least initially rely very heavily on NVDA compute and hardware solutions."
NVDA, for its part, is up more than 4% in Wednesday's session, adding to Tuesday's gains that were sparked by Trump's reversal of Biden-era AI restrictions.
Is Oracle stock a buy, sell or hold?
Oracle has put in a solid performance on the price charts over the past 12 months, up 60% on a total return basis (price change plus dividends) vs the S&P 500's 27% gain. And Wall Street sees even more upside for the tech stock.
According to S&P Global Market Intelligence, the average analyst target price for ORCL stock is $194.41, representing implied upside of nearly 5% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm CFRA Research is one of those with a Buy rating on the large-cap stock, and raised its price target to $210 from $189 following the Stargate announcement.
"After a year of speculation, Stargate appears larger than we even anticipated," says CFRA Research analyst Angelo Zino. "The project has the potential to inject significant growth for ORCL and all the parties involved as more AI use cases emerge and we shift to a Physical AI world, with AI set to become embedded across more industries/enterprises."
Related Content
-
Stock Market Today: Stocks Lose Steam After CPI, US-China Trade DealWall Street initially cheered soft inflation data and hopeful tariff news, but momentum stalled in late-day trading.
-
Is Your Will 'Fair'? Estate Planning Is About More Than MoneyYour will and estate plan should leave your heirs feeling loved. An expert weighs in on how to avoid family feuds after you're gone.
-
Stock Market Today: Stocks Lose Steam After CPI, US-China Trade Deal
Wall Street initially cheered soft inflation data and hopeful tariff news, but momentum stalled in late-day trading.
-
June Fed Meeting: Live Updates and CommentaryThe June Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. have to say about interest rates and the economy.
-
May CPI Shows Tariffs Have Yet to Impact Inflation: What the Experts SayThe May CPI report shows that President Trump's whipsaw tariff policies have not had an outsized impact on inflation, but economists remain on guard.
-
Financial Professional's Key to Peace of Mind in Retirement: Income PlanningCreating guaranteed income sources in retirement will help you truly enjoy your golden years and spend less time worrying about money.
-
Don't Let a Market Crash Crush Your RetirementIt's a comfort to know that with the right strategies, you can weather just about anything a crazy stock market can throw at you.
-
Stock Market Today: Wall Street Is Standing ByThe waiting is the hardest part with trade war truce talks underway and inflation data on the way.
-
The Best Covered-Call ETFs to BuyCovered-call ETFs can provide consistent, above-average income generation, but they can also cap potential upside. Here's what to look for.
-
Wealth Advisers: In Estate Planning, the End Is Just the BeginningWe need to keep the lines of communication with our clients open so that we can anticipate and help them navigate issues that arise over time.
