The U.S. economy has produced the world’s most valuable companies for more than a century. United States Steel became the first $1 billion company in 1901, and 117 years later in 2018, Apple became the first enterprise to achieve a valuation of $1 trillion.
Apple remains the world’s largest company with a market capitalization of $3.3 trillion. But since 2018, several other American organizations have joined it in the trillion-dollar club, including Microsoft, Nvidia, Amazon, Alphabet, Meta Platforms, and Berkshire Hathaway. Tesla and Broadcom were also members until they recently suffered sharp declines in their stock prices.
I think one more company has the potential to cross the $1 trillion milestone in the coming years. Oracle (ORCL 1.09%) operates some of the best data center infrastructure for artificial intelligence (AI) development, and management’s guidance suggests this part of its business could grow tenfold over the long term.
Oracle is valued at $403 billion as of this writing, so investors who buy the stock today could earn a whopping 148% gain if it does join the $1 trillion club.
Image source: Getty Images.
Demand for AI data centers is through the roof
There are two key phases involved in developing an AI model: The training phase is when a developer feeds the model mountains of data for it to learn from, and the inference phase is when the model accepts inputs from users and generates responses (like when you interact with a chatbot). Both require a substantial amount of computing power, and most developers source it from companies like Oracle.
Oracle operates some of the best AI data centers in the world. They are fitted with state-of-the-art graphics processing units (GPUs) from leading suppliers like Nvidia and Advanced Micro Devices, which are chips specifically designed to handle AI workloads. In fact, Oracle is currently building a cluster of 64,000 Nvidia Blackwell GB200 GPUs — not only is that the most powerful chip in the industry right now, but this will also be one of the largest clusters on offer by any data center operator.
When developers have access to more chips, they can process more data, more quickly, and thus deploy much “smarter” AI models. But scale isn’t Oracle’s only advantage, because its proprietary random direct memory access (RDMA) networking technology allows data to move from one point to another much faster than traditional Ethernet networks. Since developers typically pay for computing capacity by the minute, this can result in significant cost savings.
Oracle opened its 101st data center cloud region during its fiscal 2025 third quarter (ended on Feb. 28), but demand continued to significantly outstrip supply. In fact, chairman Larry Ellison said GPU usage for AI training purposes alone has soared by a staggering 244% over the last 12 months, and the company is also seeing “enormous” demand for inference workloads.
Nvidia CEO Jensen Huang thinks next-generation AI reasoning models, which spend more time “thinking” before rendering responses, will consume 100 times more computing power than their predecessors. As a result, demand for data center capacity for inference workloads is only just heating up, so it’s no surprise Oracle wants to grow its footprint to between 1,000 and 2,000 cloud regions over the long term.
In other words, Oracle could eventually have over 10 times more data centers in operation than it does today.
Oracle Cloud Infrastructure revenue is soaring
Oracle generated $14.1 billion in total revenue during the fiscal 2025 third quarter, but the Oracle Cloud Infrastructure (OCI) segment (which is where the company accounts for its AI data centers) represented just $2.7 billion of that figure.
However, while Oracle’s total revenue increased by just 6% year over year, OCI revenue soared by 49%, making it the fastest-growing part of the entire organization by a wide margin. The OCI business would be growing even faster if it had enough data centers to meet demand, which is why the company expects revenue growth to significantly accelerate as more capacity comes online.
Oracle CEO Safra Catz expects OCI revenue to increase by more than 50% for the fiscal 2025 full year (ending May 31), with an even faster growth rate in the cards for fiscal 2026.
To put a fine point on Oracle’s future potential, the company’s remaining performance obligations (RPOs) soared by 63% to a record high of $130 billion (across all business segments) during the third quarter. RPOs are like an order backlog that is expected to convert into revenue in the future, and Larry Ellison said demand for capacity for AI training and inference workloads were big drivers of the Q3 surge.
Oracle’s path to the $1 trillion club
Oracle generated $4.26 in earnings per share (EPS) over the last four quarters, which places its stock at a price-to-earnings (P/E) ratio of 33.8. That is roughly on par with the valuations of other AI cloud companies like Microsoft and Amazon, so the stock isn’t necessarily cheap, nor is it expensive:
However, Wall Street’s consensus estimate (provided by Yahoo!) suggests Oracle could deliver $6.78 in EPS during fiscal 2026 (which begins in June 2025). That places its stock at a forward P/E ratio of just 21.1, implying it would have to rise by 59% over the next year or so just to maintain its current P/E ratio of 33.8.
If that scenario plays out, it would lift Oracle’s valuation to $640 billion. From there, the company could reach the $1 trillion club within five years if it grows its EPS by just 9.3% annually. I think that is very achievable for two reasons: First, the company’s estimated EPS for fiscal 2026 represents growth of 13%, and second, management is forecasting accelerating revenue growth, led by the OCI business.
Oracle’s data centers rely heavily on automation, which reduces labor and other operating costs. As a result, the company anticipates rising profit margins as the OCI business continues to scale up, which will boost its EPS overall. Remember, Oracle plans to grow its data center footprint more than tenfold from here, which could drive explosive earnings growth over the long term.
Therefore, I think Oracle has a clear path to joining the $1 trillion club in the coming years, and its stock could be a great addition to any diversified portfolio.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Oracle, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
