Oracle (ORCL) stock is surging in Wednesday after President Donald Trump unveiled The Stargate Project, which will invest up to $500 billion to build artificial intelligence (AI) infrastructure in the United States over the next four years.
The Stargate Project is a new company formed and funded by Japanese investment firm SoftBank, OpenAI, Oracle and technology investment firm MGX.
"This infrastructure will secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefit for the entire world," said OpenAI in the press release. "This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies."
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The firms will begin by investing $100 billion "immediately," OpenAI said, with up to $400 billion being invested in the years to follow.
The first joint venture of The Stargate Project will be the construction of data centers in Texas, Oracle co-founder Larry Ellison said, according to CNBC.
"While investors have become increasingly concerned about peak compute demand, this should go a long way to quelling these concerns and potentially adding growth runway for" AI chipmakers, including Nvidia (NVDA) beyond calendar year 2026, says UBS Global Research analyst Timothy Arcuri.
Arcuri adds that while details are thin at the moment, it "sounds like the project will at least initially rely very heavily on NVDA compute and hardware solutions."
NVDA, for its part, is up more than 4% in Wednesday's session, adding to Tuesday's gains that were sparked by Trump's reversal of Biden-era AI restrictions.
Is Oracle stock a buy, sell or hold?
Oracle has put in a solid performance on the price charts over the past 12 months, up 60% on a total return basis (price change plus dividends) vs the S&P 500's 27% gain. And Wall Street sees even more upside for the tech stock.
According to S&P Global Market Intelligence, the average analyst target price for ORCL stock is $194.41, representing implied upside of nearly 5% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm CFRA Research is one of those with a Buy rating on the large-cap stock, and raised its price target to $210 from $189 following the Stargate announcement.
"After a year of speculation, Stargate appears larger than we even anticipated," says CFRA Research analyst Angelo Zino. "The project has the potential to inject significant growth for ORCL and all the parties involved as more AI use cases emerge and we shift to a Physical AI world, with AI set to become embedded across more industries/enterprises."
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