Could This Artificial Intelligence (AI) Stock Leapfrog Into the $1 Trillion Club by 2028?

Core Insights - Investing in a leading enterprise AI company like Oracle is seen as a smart strategy for the coming years due to its significant growth potential driven by AI infrastructure demand [1] Company Performance - Oracle's shares have surged nearly 74% in 2025, reflecting strong market performance [1] - As of October 6, Oracle's market capitalization stands at $828.6 billion, with a target to reach $1 trillion by 2028 [2] Revenue and Backlog - Oracle reported remaining performance obligations (RPO) of $455 billion at the end of Q1 fiscal 2026, a 359% increase year-over-year [3] - The company expects Oracle Cloud Infrastructure (OCI) revenues to grow by 77% year-over-year to $18 billion in fiscal 2026, and to reach $73 billion by fiscal 2028 [5] Cloud Infrastructure and Capacity Expansion - Oracle operates 34 multicloud data centers and plans to build an additional 37 by the end of fiscal 2026, with multicloud database revenues growing by 1,529% year-over-year [4] - The company has planned nearly $35 billion in capital expenditures for fiscal 2026 to enhance data center capacity [9] Financial Health - Oracle ended Q1 with $11 billion in cash and marketable securities, $12 billion in short-term deferred revenue, and an operating cash flow of $8.1 billion [10] - Despite a total debt of $94 billion, Oracle maintains investment-grade credit ratings from Moody's and S&P Global [12] Market Potential - The AI database launched by Oracle is expected to drive significant growth by enabling enterprises to run complex AI models securely [6][7] - Management anticipates that the inferencing opportunity in AI will surpass the training market, positioning Oracle as a dominant player [8] Future Outlook - To achieve a market cap of $1 trillion by 2028, Oracle needs to increase its market cap by nearly 21%, which is feasible if it effectively converts backlog into revenue and expands data center capacity [13] - Analysts project Oracle's non-GAAP EPS to be around $11.2 in fiscal 2028, suggesting a potential share price of approximately $409.9, over 40% higher than its recent close [15]