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

The US economy has a history of producing the most valuable companies in the world. United States Steel became the first billion-dollar company in 1901, and 117 years later, Apple became the first company in the world to surpass a $1 trillion valuation.

Apple is now worth over $3 trillion, but as of 2018, the tech giants Nvidia, Microsoft, Amazon, Meta platformsand Alphabet they joined him in the trillion dollar club. But I believe yet another is about to join them.

Oracle (NYSE: ORCL) was founded in 1977 and since then has participated in almost every technological revolution. Right now, it’s quickly becoming a leader in artificial intelligence (AI) data center infrastructure, which could be the company’s ticket to a $1 trillion valuation.

Based on Oracle’s current market cap of $429 billion, investors who buy its stock today could make a 133% gain if they get there.

A leader in AI infrastructure

Large Language Models (LLM) are the foundation of every AI software application. They are trained by ingesting mountains of data, and from there the model identifies patterns and learns to make predictions. Typically, the most “smart” AI applications are powered by LLMs with the most data, and the training process is facilitated by centralized data centers full of graphics processing units (GPUs).

Nvidia provides the world’s most powerful GPUs for AI model development. Simply put, the more GPUs a developer can access, the more data they can feed into an LLM and the faster it can be processed. Oracle Cloud Infrastructure (OCI) Supercluster technology allows developers to scale up to more than 32,000 Nvidia GPUs (and soon more than 65,000), which is more than any other data center vendor.

In addition, the company’s random access direct memory access (RDMA) technology moves data from one point to another faster than traditional Ethernet networks. Because developers often pay for computing capacity by the minute, OCI is among the fastest and cheapest solutions for training LLMs. That’s why AI leaders like OpenAI, Cohere and Elon Musk’s xAI now use Oracle.

Oracle President Larry Ellison says the company currently has 85 live data centers, 77 of which are under construction. However, he estimates the company will eventually have somewhere between 1,000 and 2,000, so he’s barely scratched the surface of his opportunity so far.

Automation is one thing that sets Oracle apart from other data center operators. Regardless of its size, each Oracle data center is functionally identical, so the company can manage them all with software alone — no people required. Not only is this a great cost saving for the end user, but it also creates a more secure service by eliminating human error. Additionally, automation is key to scaling to thousands of Oracle data center locations.

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Oracle data center revenue is growing

Oracle generated total revenue of $13.3 billion in the first quarter of fiscal 2025 (ended Aug. 31), an increase of 7% from the year-ago period. The OCI segment, in particular, generated $2.2 billion in revenue, up 46%.

As in previous quarters, OCI’s revenue would have grown even faster during the first quarter if the company had brought more data centers online. It currently has a huge number of customers waiting for more computing power.

This is reflected in Oracle’s remaining performance obligations, which reached a record $99 billion during the quarter, up 52% ​​year over year. That was an acceleration from the 44% growth the company achieved in the last quarter of fiscal 2024. Oracle signed 42 new deals for GPU capacity worth $3 billion in the first quarter alone, helping to boost sudden release of remaining performance obligations (RPO).

CEO Safra Catz believes 38% of the company’s RPOs (about $37.6 billion) will be converted to revenue over the next 12 months, which should help the company return to double-digit percentage growth at the top line. In addition, it expects an acceleration in OCI growth compared to the previous fiscal year.

Oracle’s (mathematical) path to the $1 trillion club

Oracle generated earnings per share of $3.88 over the past 12 months. So, based on the current share price of $155.89, it trades at a price-to-earnings (P/E) ratio of 40.2. The Nasdaq-100 the tech index trades at a P/E ratio of 30.7, so Oracle stock certainly isn’t cheap when measured against its peers.

However, Oracle’s trailing 12-month earnings rose 15% from the prior period, and Wall Street is forecasting accelerated earnings growth of 24% for fiscal 2025. That could explain why investors are now willing to pay a premium for its shares.

Mathematically speaking, if Oracle’s P/E ratio remains constant, the company could reach a $1 trillion valuation within the next 10 years, even if its earnings growth slows to just 8.8%. But that’s a very conservative estimate given, based on Ellison’s comments, that it could grow the data center footprint. ten times in the long term. If that happens, Oracle’s earnings growth is likely to accelerate, not decelerate, over the next decade.

Remember, the company’s data centers rely on automation, so they offer incredible scalability. In other words, Oracle should experience an increasing gross profit margin as more data centers are built, which will be a huge tailwind for its earnings.

As a result, I think Oracle has a great opportunity to join its big tech peers in the $1 trillion club within the next decade.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Suzanne Frey, chief executive at Alphabet, is a member of the Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Anthony Di Pizio has no position in any of the shares mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Oracle. The Motley Fool recommends the following options: long $395 January 2026 Microsoft calls and short $405 January 2026 Microsoft calls. The Motley Fool has a disclosure policy.

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