Nvidia, Broadcom, other AI names rally on Oracle’s growth projections
Oracle Corp Chief Executive Larry Ellison during a launch event at the company’s headquarters in Redwood Shores, California June 10, 2014.
Noah Berger | Reuters
Oracle‘s impressive growth in cloud infrastructure is benefiting the entire industry.
The company’s forecast of reaching $114 billion in sales by fiscal year 2029 indicates a sustained demand for artificial intelligence processing, necessitating the expansion of Oracle’s data center infrastructure.
“Oracle’s projection of a 14x increase in its cloud infrastructure segment within 5 years, driven mainly by GPU cloud demand, along with a capex guidance of $35 billion in FY26, is a positive sign for Nvidia, other AI hardware suppliers, and the ecosystem of partners supporting Oracle’s GPU data centers,” noted UBS analyst Karl Keirstead.
Following Oracle’s stock surge of 36%, companies involved in providing chips and systems for its expansion, or those competing with it, experienced significant stock price increases on Wednesday.
Nvidia, whose computers and chips account for approximately 70% of the budget for an AI data center, saw a 4% increase in its stock price.
Taiwan Semiconductor Manufacturing Co., a key chip manufacturer for Nvidia and other AI companies, saw a more than 4% increase in its stock price after reporting a 34% sales growth in August.
Broadcom, a provider of networking gear that links Nvidia chips and plays a crucial role in custom AI chip development for companies like Google, saw a 10% increase in its stock price.
AMD is Nvidia’s main competitor in the graphics processor market for AI, with its shares rising by 2% despite having a smaller market share currently.
Micron, a manufacturer of memory components used in Nvidia’s advanced chips, experienced a 4% increase in its stock price.
Super Micro and Dell, manufacturers of server systems based on Nvidia’s chips, each saw a 2% increase in their stock prices.
“The majority of our CapEx investments are aimed at revenue-generating equipment for our data centers,” stated Oracle’s Safra Catz.
One of Oracle’s emerging cloud rivals, CoreWeave, saw a 17% surge in its stock price due to the growing demand for AI compute power. These neo-cloud providers compete with industry giants like Google, Amazon, and Microsoft by offering enhanced access and tools for artificial intelligence applications.
