Oracle Sparks Bubble Talk With Stock Price in Dot-Com Territory

Core Viewpoint - Oracle Corp. has experienced a significant stock price increase of 84% this year, driven by strong demand for AI computing and a projected 700% revenue growth in its cloud-computing business over the next three fiscal years [2][5] Group 1: Stock Performance - Oracle's stock performance ranks as the seventh-best in the S&P 500 Index, with a notable 36% increase following the revenue projection announcement on September 10 [2] - The current price-to-estimated earnings ratio for Oracle is 43 times, the highest since the dot-com era, making it more expensive than eight of the nine most valuable companies in the S&P 500 [4] Group 2: Market Position and Comparisons - Oracle has been linked to negotiations involving the Trump administration regarding TikTok, serving as its primary cloud infrastructure provider [3] - In comparison, Nvidia Corp. trades at 31 times projected profits, with expectations of faster sales growth, highlighting Oracle's relatively high valuation [4] Group 3: Analyst Perspectives - Analysts express caution regarding Oracle's stock valuation, noting that the anticipated growth is expected to materialize several years from now, which contributes to its high current valuation [5] - The long-term growth outlook suggests a more manageable earnings multiple of 25 times over the next three years, although this is still nearly double the average over the past decade [5][6] Group 4: Investor Sentiment - Investors are increasingly viewing Oracle as a potential AI winner, contrasting its previous perception as a low-growth company [5] - The willingness of investors to adopt a long-term view is evident, as seen with other growth stocks like Tesla and Palantir, which are priced significantly higher than Oracle [6]