1 Phenomenal Stock That Could Join Microsoft, Apple, Nvidia, Alphabet, Amazon, and Meta in the $1 Trillion Club

Recent developments in artificial intelligence (AI) are having a dramatic impact on the technology landscape, which is evident in the market value of some of the world’s most technologically advanced companies. What many of these companies have in common is that they are pioneers in AI.

Litter is currently the leader (as of this writing), with Microsoft currently in second place, with market values of US$3.4 trillion and US$3.3 trillion, respectively. NvidiaThe country’s rise has been breathtaking, adding nearly $2 trillion in value last year and rising to $2.9 trillion to rank third. Alphabet, AmazonIt is Metaplatforms – all at the forefront of the AI ​​revolution – boast market capitalizations of $2.2 trillion, $1.9 trillion and $1.2 trillion, respectively.

With a market capitalization of just $387 billion, it may seem unlikely to suggest that Oracle (NYSE:ORCL) may be in the running to become a member of the $1 trillion club. However, an analysis of the company’s recent results and management commentary suggests that the adoption of generative AI could take the company to new heights in the coming years.

A partner in AI

Oracle occupies an enviable position in the AI ​​revolution. It delivers cloud, database and enterprise software solutions trusted by 98% of global Fortune 500 companies. Oracle’s information technology (IT) expertise makes it one of the go-to sources for companies looking to adopt generative AI solutions.

This helped fuel solid global growth. During Oracle’s fiscal 2024 fourth quarter (ended May 31), revenue of $14.3 billion grew 3% year over year, while operating profit increased 15% — but that doesn’t tell the whole story.

During the fourth-quarter earnings call, president and chief technology officer Larry Ellison noted that the company signed more than 30 AI-centric contracts worth more than $12 billion in the most recent quarter alone. This included some of the largest contracts in Oracle’s history. Ellison said he expects robust demand for generative AI to “turbocharge” the company’s cloud database growth.

This, in turn, brought the company’s remaining performance obligation (RPO) – or contracts not yet recognized as revenue – to $98 billion, a 44% increase year over year. When RPO grows faster than revenue, it suggests that sales growth is accelerating. This helps illustrate that Oracle is capitalizing on the growing demand for AI among its sizable customer base.

The path to $1 trillion

Oracle’s long history of cloud and AI expertise has seen many new and existing enterprise customers join the generative AI bandwagon, seeking to benefit from increased productivity resulting from the adoption of AI. That being said, luck favors the patient as this process will take some time to come to fruition.

The story continues

According to Wall Street, Oracle is expected to generate revenue of $57.9 billion in its 2025 fiscal year (which began June 1), giving it a forward price-to-sales (P/S) ratio of approximately 7. Assuming its P/S remains constant, Oracle would need to grow its revenue to approximately $148 billion annually to sustain a $1 trillion market cap.

Revenue grew 11% year over year in the most recent quarter and is expected to accelerate to 15% in the fiscal year. If the company achieves 11% sales growth, Oracle could reach a market value of $1 trillion by 2034. However, if the company can maintain a 15% growth rate, it will lose a few years of that timeline , reaching a market of US$ 1 trillion. limit until 2032.

That said, estimates regarding the impact of adopting generative AI continue to rise. Conservative estimates suggest the market could grow to between $2.6 billion and $4.4 billion annually, according to global management consulting firm McKinsey & Company.

If Oracle continues to successfully leverage this AI opportunity and continues along its current growth trajectory, the company could reach a $1 billion market capitalization sooner than many expect.

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Suzanne Frey, an Alphabet executive, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft and Nvidia. The Motley Fool holds positions and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The motley fool has a disclosure policy.

1 Phenomenal Stock That Could Join Microsoft, Apple, Nvidia, Alphabet, Amazon, and Meta in the $1 Trillion Club was originally published by The Motley Fool