Oracle (ORCL US) surged overnight after Trumps Stargate announcement but the $US520bn tech giant was already enjoying a strong few years, with this week’s news just giving the stock another leg-up. ORCL shares jumped ~7% on news that the software maker is involved in a joint venture with OpenAI and SoftBank to build AI intelligence infrastructure in the U.S.
Co-founder Larry Ellison is very entwined/well positioned for Trumps new administration:
- Last year Oracle picked up cloud business from AI startup OpenAI, which needs large numbers of Nvidia graphics processing units to train and run AI models for its ChatGPT assistant and other products, a fellow Stargate participant.
- Ellison has strong connections to the White House, having hosted a fundraiser for Trump in 2020 and allied himself with Elon Musk after advising him for months.
- Oracle is also the cloud infrastructure provider for TikTok, which went dark over the weekend in response to a law passed by Congress and signed by former President Joe Biden.
As the saying goes, “don’t fight the tape” which in this case is supported by a the Trump factor.
- We are targeting a move above $US200 for Oracle in the short-term, or around 10% upside.
MM is bullish toward Oracle (ORCL US)
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