Oracle share price: ORCL stock jumps at NYSE, what is making it one of top turnover stocks in Software & IT Services sector

Oracle stock on Tuesday jumped more than five per cent to soar nearly USD 140-mark. ORCL share price at New York Stock Exchange (NYSE) hit USD 139.40 after a jump of 5.17 per cent.

While, Wall Street's Software & IT Services sector has been down by 0.39 per cent, Oracle Corp stock has surged. Top three turnover stocks in this sector are Oracle Corp, Meta Platforms, and Alphabet.

Oracle's move to protect itself against potential delays at a massive data center project developed by Blue Owl in New Mexico sent a chill through the trillion-dollar market for AI infrastructure financing, according to interviews with bankers and investors.


Oracle issued a force majeure notice in connection with Jupiter, a data center campus Blue Owl unit STACK Infrastructure is building to support OpenAI, the latest setback for a sector where lenders and investors are growing more cautious about financing the industry's breakneck expansion.

Blue Owl said the notice did not alter the parties' commitment to the project. Even so, the event is reverberating through discussions around other proposed data center financings, including SB Energy, which is developing a campus to serve OpenAI in Ohio, a person close to its financing said. SB Energy decided this week to delay its IPO.

Companies can use force majeure provisions when events beyond their control make it difficult to meet their contractual obligations. Lawyers say such provisions are becoming more common in data center development agreements, raising concerns among lenders and investors.

US corporate debt markets have been remarkably resilient in the face of soaring Treasury yields and growing concern over AI data center buildout costs. Until now. Cracks are beginning to appear — high-yield spreads broke out on Friday to the widest since April and are approaching 300 basis points, but investment-grade spreads are finally starting to move too. They ended last week at 81 bps, and on Monday likely hit the widest since April.

Oracle's debt issues are nothing new, but the blowout in the company's borrowing costs and CDS rates is still remarkable. Meta's bond yields and CDS are also breaking sharply higher. Hyperscalers' bond issuance this year is around $220 billion, and could double next year. It will come at a price, though. An increasingly high price.

The global AI market must reach nearly USD 6 trillion annually by 2031 to fund AI infrastructure and justify the massive capital being deployed, according to a report by global management consultancy firm Bain & Company.

Much of that value will have to come from new innovation rather than gains in employee productivity, Bain said in its 7th annual Global Technology Report released on Tuesday.

According to the report, annual spending on AI infrastructure could reach USD 1.5 trillion by 2031. This includes new data centres, compute capacity and upgrades to installed GPUs, memory and networking equipment.

Based on the assumption that capital expenditure amounts to about 25 per cent of industry revenue, Bain said sustaining this level of investment would require an AI market approaching USD 6 trillion a year by 2031.

The report noted that capital expenditure by the major hyperscalers (Microsoft, Google, Amazon, Meta, and Oracle) could reach USD 780 billion in 2026. That is nearly five times the level of three years earlier.

AI compute demand has also revived the hardware industry. Hardware and semiconductor stocks grew at a compound annual rate of 24 per cent between 2020 and 2026, compared with 6 per cent for software, the report said.