Key Points

• Oracle’s cloud growth forecast drives AI hardware demand: Revenue expected to reach $114 billion by 2029 with $35 billion in capital expenditures in 2026 for new AI-focused data centers.
• Significant gains for major hardware stocks: Nvidia +4%, TSMC +4%, Broadcom +10%, AMD +2%, Micron +4%, Super Micro and Dell +2% each.
• Neo-cloud competitor CoreWeave surges 17%, highlighting strong market demand for AI computing.

AI Stocks Surge Following Oracle’s Impressive Growth Forecast

Oracle unveiled a dramatic growth forecast for its cloud business, triggering a surge in the stock prices of hardware and AI companies, including Nvidia, Broadcom, AMD, Micron, and TSMC. The projections indicate sustained demand for AI processing systems in the coming years and underscore the central role of hardware and system providers in the rapidly evolving cloud and computing market.

Oracle’s Cloud Growth Forecast

Oracle expects revenue from its cloud segment to reach $114 billion by fiscal year 2029, alongside $35 billion in capital expenditures in FY2026. Most of these investments are aimed at building new data centers focused on GPUs and AI, signaling the company’s intention to expand its AI operations and capture market share from major competitors such as AWS, Google Cloud, and Microsoft Azure.

UBS analyst Karl Keirstead explained that the forecast to increase Oracle’s cloud segment fourteenfold over five years, driven primarily by GPU demand, is highly positive for Nvidia, other AI hardware providers, and the broader ecosystem of partners building and financing Oracle’s data centers. This means that the massive investment in new data centers is expected to increase demand for graphics chips, memory, and processing speed, driving up the stock prices of the companies involved.

Ripple Effect on Hardware Stocks

Stock gains were recorded across nearly all companies supplying the hardware for Oracle’s data centers, as well as some of its competitors. Nvidia, which accounts for roughly 70% of the budget for AI data centers, rose 4%, while TSMC, which manufactures chips for Nvidia and other AI companies, also gained 4% after reporting a 34% increase in August sales. Broadcom, which provides networking equipment for connecting Nvidia chips and contributes to custom AI chips for clients like Google, jumped 10%, while AMD, Nvidia’s main competitor in AI graphics processors, gained 2%. Micron, which produces memory for Nvidia’s advanced processors, rose 4%, and Super Micro and Dell, manufacturers of servers integrating Nvidia chips, increased by 2% each.

Impact of Neo-Clouds and Emerging Competitors

CoreWeave, a competitor in the Neo-cloud space, surged 17%, reflecting strong market enthusiasm for new AI trends. Neo-cloud providers compete with Google, Amazon, and Microsoft and offer advanced services for AI clients, focusing on faster access, better tools, and improved AI processing capabilities. Oracle CEO Safra Catz noted that most of the company’s CapEx investments are for revenue-generating equipment deployed in data centers, reinforcing the understanding that massive AI investments act as a growth engine for the entire hardware ecosystem.

Conclusions and Market Outlook

Oracle’s cloud growth forecasts highlight the increasing demand for AI computing, which is boosting the stock prices of chip makers, hardware providers, and server system manufacturers. The ripple effect points to a long-term upward trend in the AI and hardware infrastructure market, emphasizing the economic potential of the cloud and AI sectors in the coming years. For investors, the projections indicate a significant opportunity to invest in AI-related hardware stocks, while accounting for increasing competition and the need for careful risk management.