Oracle’s $230 billion market cap surge to lift it above JPMorgan

(Bloomberg/Jeran Wittenstein and Subrat Patnaik) — Oracle Corp. is set to vault past stocks such as JPMorgan Chase & Co. to become the 10th most valuable member of the S&P 500, after a blowout cloud business forecast sent its shares soaring.

If the stock’s 40% gain holds, Oracle would see its value rise by more than $230 billion to propel its market capitalization to roughly $916 billion, overtaking JPMorgan, Walmart Inc., Eli Lilly & Co. and Visa Inc.

While it would be the biggest intraday jump for Oracle since 1992, it would be its biggest single-session market value addition ever, according to data compiled by Bloomberg. The gain alone would be more than the market capitalizations of Intuit Inc. or Booking Holdings Inc.

Oracle gave an aggressive outlook for its cloud business and struck lucrative deals that boosted its remaining performance obligations (RPO) — a measure of bookings.

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“RPO stole the show” in the quarter, surging 359% to hit $455 billion, Jefferies analysts led by Brent Thill wrote in a note. This helped the company blow past expectations, “reinforcing confidence in Oracle’s acceleration narrative,” said Thill.

Still, not all analysts were fully convinced about the outlook. Bloomberg Intelligence’s Anurag Rana noted that RPO surge “could put the spotlight on how the cloud provider plans to fulfill this demand in a capacity-constrained climate,” adding that “capital required to fund this expansion will likely be the main discussion points.”

Some money managers had similar concerns.

“I don’t know if their guidance is actually realistic but the market is buying it and buying fully,” Enguerrand Artaz, a fund manager at La Financière de l’Echiquier said. “It’s quite symptomatic of a market which has no hesitation on fully buying themes like AI.”

Through Tuesday’s close, shares in the software maker have risen 45% this year, adding about $212 billion in market value. The expansion is being fueled by its cloud infrastructure business as demand for AI is showing no signs of letting up.

–With assistance from Ryan Vlastelica, Julien Ponthus and Brandon Harden.

(Updates stock moves throughout and charts.)

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