Why Oracle Stock Just Jumped
Key Points
Oracle and Google Cloud are expanding their partnership to bring Google's Gemini AI models directly into Oracle AI Agent Studio, the company's toolkit for building AI agents.
Microsoft's blowout earnings -- including 43% Azure growth and $130 billion in new data center leases -- are lifting the entire cloud and AI compute sector, Oracle included.
Despite the positive industry tailwinds, Oracle's heavy debt load and overreliance on OpenAI as a customer make the stock too risky in my view.
- 10 stocks we like better than Oracle ›
Oracle Corporation (NYSE: ORCL) stock was up 8.2% as of 3:20 p.m. ET Thursday. The S&P 500 and the Nasdaq Composite were up 1.8% and 3%, respectively.
Shares of the company are gaining after it announced, alongside Alphabet's Google, that the two tech giants are expanding a key partnership.
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The tech market is also getting a lift across the board after Microsoft's better-than-expected earnings were released Wednesday afternoon.
Oracle and Google Cloud deepen their AI partnership
Oracle and Google Cloud -- the cloud unit of Alphabet -- said Thursday they are widening a partnership that already lets Oracle customers reach Google's Gemini models through Oracle Cloud Infrastructure (OCI), Oracle's rented computing business.
Under the expansion, Gemini models are slated to show up inside Oracle AI Agent Studio, the toolkit Oracle customers use to build AI agents. Two models were named: Gemini 3.1 Flash Lite, a cheap model meant for high-volume work, and Gemini 3.5 Flash for harder reasoning tasks.
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Microsoft's earnings are lifting the whole sector -- here's why it matters for Oracle
The bigger driver, however, is probably what happened after Wednesday's close. Microsoft released earnings that included a 43% jump in its Azure sales, the company's cloud business.
It also revealed $130 billion in new data center leases last quarter alone and said it expects to roughly double its data center capacity within two years. Given that Oracle has gone all-in on providing AI compute, Microsoft's leasing spree is a good sign of strong demand.
That may be true, but I see Oracle stock as too risky given its use of expensive debt and its overreliance on a single customer, OpenAI.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Oracle. The Motley Fool has a disclosure policy.
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