Prediction: This AI Stock Could Be the First New $1 Trillion Company of the Decade

Key Points

• The surprising jump in remaining performance obligations sent Oracle stock shooting higher in early September.

• Investors should look closely at the financials before deciding whether to buy.

• 10 stocks we like better than Oracle ›

Since Apple became the first company to reach a $1 trillion market cap in 2018, tech investors closely followed companies that have reached this milestone. Today, a total of 10 U.S. companies have market caps above $1 trillion, with Berkshire Hathaway being the only one without direct ties to the artificial intelligence (AI) industry.

However, the next tech stock in line to achieve this milestone is Oracle (NYSE: ORCL), a company that may come as a surprise to many investors. Here's how it is most likely to reach the $1 trillion mark as it reemerges as a force in the AI industry.

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Image source: Getty Images.

Oracle's rise to $1 trillion

Long known as a database company, Oracle leveraged its extensive data center presence to pivot into the cloud, creating Oracle Cloud Infrastructure (OCI). That successful shift in Oracle happened largely under the radar, as its larger competitors captured most of the investor attention.

Image source: Statista.

In many cases, Oracle provides a competitive advantage over other cloud providers, and not just for its own workloads. OCI stands out by providing lower costs for compute capacity and the ability to scale performance and capacity more precisely than competitors like Amazon's AWS.

This product is so successful that in the first quarter of fiscal 2026 (ended Aug. 31), its remaining performance obligations (RPOs) rose an astounding 359% to $455 billion. Amid that news, the stock rose 36% in the following trading session on Sept. 10.

That briefly took its market cap above $900 billion. Even though the market cap has pulled back into the $815 billion range, Oracle looks to have the catalysts needed to exceed the $1 trillion mark.

Additionally, there are no other likely candidates as the next $1 trillion AI company. The next largest U.S.-based tech company in AI is Palantir Technologies at a $440 billion market cap, and its elevated valuation metrics could impede its path to $1 trillion. Also, Grand View Research forecasts a compound annual growth rate (CAGR) for the cloud AI market of 40% through 2030. Even if that estimate proves optimistic, it is highly unlikely that anything would stop Oracle's march to $1 trillion.

But should investors buy?

Today, the cloud segment makes up 48% of the company's revenue. Moreover, that part of the company grew by 28% yearly in fiscal Q1. Admittedly, overall revenue growth was only 11% in that quarter, and the 11% annual revenue growth in fiscal 2025 shows that the fiscal Q1 growth rate is not an anomaly.

Nonetheless, thanks to the rise in RPOs, analysts believe overall revenue growth will rise to 17% this fiscal year and 22% for fiscal 2027, a move that should bode well for the company.

Amid such gains, it may not surprise investors that the stock is up more than 380% over the last five years, including a 135% gain from its April low.

Still, Oracle's balance sheet might give investors pause. Its liquidity is around $11 billion, a modest level compared to companies like Apple or Google parent Alphabet. It has also taken on more than $91 billion in debt, a considerable strain on the balance sheet, considering its book value of less than $25 billion.

Buying Oracle stock will also come at a price. The company's current P/E ratio is 67, making it far more expensive than its close competitors in the Magnificent Seven. Such an earnings multiple may leave investors questioning whether Microsoft, Amazon, or Alphabet might be a more suitable choice.

ORCL PE Ratio data by YCharts

The next trillion-dollar AI company

In the race to AI, Oracle is already close to achieving that milestone, and no other U.S.-based AI company is likely to reach that point before Oracle.

However, a more critical question for investors is whether they should try to capitalize on that growth, and the answer is likely no.

Indeed, given the industry CAGR and Oracle's RPOs, it should beat the market. Nonetheless, the AI stocks in the Magnificent Seven have surpassed the $1 trillion market cap. Since they offer investors lower valuations and safer balance sheets, such stocks are likely more prudent choices for investors than Oracle.

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Will Healy has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, International Business Machines, Microsoft, Oracle, Palantir Technologies, Salesforce, and Tencent. The Motley Fool recommends Alibaba Group and 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.