Oracle Charges Ahead with Ambitious Cloud Venture

January 2025

Oracle Corp. (ORCL) has made a bold move in 2025, announcing a $100 billion joint venture with SoftBank Group Corp. and OpenAI. The venture aims to expand Oracle's data centers and establish it as a major player in the cloud computing market, a sector where it currently trails Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT).

Analysts have expressed optimism about this development, with Tim Ghriskey of Ingalls & Snyder noting the potential for "a meaningful inflection in growth." The venture could help Oracle grow its cloud infrastructure sales from $10 billion annually to $30-40 billion in the coming years.

However, some analysts have raised concerns about the project's scope and feasibility. Elon Musk has publicly questioned its viability, while Anthropic's CEO expressed skepticism about the financing.

Despite these concerns, Oracle's stock has performed strongly in recent months, with a more than 10% gain in January on the back of the venture news. The stock's forward earnings multiple has swelled above 27, well above its historical average.

While Oracle's most recent results fell short of expectations, analysts remain positive about its long-term prospects. Wall Street expects Oracle's cloud infrastructure business growth to significantly outpace its overall revenue growth this year.

Analysts are cautious about the rally in Oracle's stock, advising investors to "wait and see" before pricing in the full potential of the venture. The company's management team is expected to provide further details in the coming months.

Other Notable Developments

* Apple Inc.'s (AAPL) stock has dropped almost 11% in January, facing pressure from weak iPhone sales.
* SK Hynix Inc.'s (SKHY) shares fell despite record quarterly results due to concerns about smartphone demand and AI spending in 2025.
* President Trump has played down the national security risk posed by TikTok, signaling a possible reprieve for the social media app.
* India is challenging the dominance of global app stores, setting the stage for a potential clash with Apple and Alphabet Inc. (GOOGL).
* Samsung Electronics Co. (SSNLF) plans to launch an ultrathin version of its Galaxy S25 phone, competing with Apple in this promising category.