I'm LongbridgeAI, I can summarize articles.Oracle shares rose 4% as reports indicated OpenAI's annual recurring revenue is nearing $70 billion. Analysts view this milestone positively, noting it reduces concerns about Oracle's client exposure and reinforces its ability to meet compute capacity expectations. With approximately $300 billion of Oracle's remaining performance obligations tied to OpenAI, the news is seen as beneficial for both companies. This follows recent strong cloud growth and maintained capital expenditure forecasts from Oracle.
By Hannah Pedone
Wall Street is cheering AI stocks as OpenAI gets closer to a revenue milestone
OpenAI is reportedly nearly a "serious enough" revenue milestone.
OpenAI seems to be making financial strides, and that's been seen as good news for Oracle and other artificial-intelligence stocks on Tuesday.
Shares of Oracle (ORCL) were up 4% on Tuesday afternoon, after Axios reported that OpenAI's annual recurring revenue - which tracks predictable revenue from subscriptions and other sources - is nearing $70 billion.
OpenAI did not immediately respond to a request for comment.
Broadly speaking, many AI-linked stocks were rallying Tuesday. Shares of Bloom Energy (BE), an artificial-intelligence power play, were among the S&P 500's SPX biggest gainers with a 12.3% rally. Shares of optical suppliers Lumentum Holdings (LITE) and Coherent (COHR) and chip maker Marvell Technology (MRVL) were also among of the index's best performers.
Bernstein analyst Mark Moerdler told MarketWatch that the Axios report was helping Oracle's stock on Tuesday. The $70 billion figure is "serious enough to decrease concerns about client exposure" for the cloud company, he noted.
Investors have held concerns over the belief that Oracle's fate is "largely tied to the success of OpenAI," explained D.A. Davidson analyst Gil Luria. "OpenAI accelerating growth is a very good sign for Oracle, as it reinforces OpenAI's ability to live up to its expectations for compute capacity," he explained.
Patrick Walravens, head of technology equity research at Citizens, agreed that "good news for OpenAI is generally good news for Oracle." That's because roughly $300 billion of Oracle's $664 billion in remaining performance obligations - or the dollar value of contracted services that have yet to be delivered to customers or booked as revenue - comes from OpenAI.
Shares of Oracle have fallen more than 29% so far this year, but the company recently won praise from Wall Street after its latest earnings report. Some encouraging signs were that Oracle maintained its forecast for capital expenditures - or money put toward things like data centers and hardware - and reported strong cloud growth. That dispelled some fears about whether its AI investments would actually show returns.
Moerdler added that interest in Oracle's stock is "very high" among investors he talks to, including those who may not own shares.
See also: The old new thing: Cisco and retro tech are back and forming the AI buildout's backbone
-Hannah Pedone
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09-29-26 1428ET