In a year defined by the AI arms race and a shifting geopolitical landscape, Oracle (NYSE: ORCL) has emerged as one of the market’s most compelling growth stories. With its stock up over 85% in 2025 and a strategic repositioning at the heart of the AI and cloud revolution, the venerable tech giant is no longer just a database company. It is a central player in the future of technology, with its role in the highly anticipated TikTok deal serving as a powerful validation of its new direction.
Oracle’s Meteoric Rise: The Cloud and AI Catalysts
The cornerstone of Oracle’s success has been its aggressive and successful pivot to its Oracle Cloud Infrastructure (OCI) platform. This strategy is paying off handsomely as the global demand for AI computing capacity explodes. In its recent fiscal Q1 2026 earnings report, Oracle delivered a jaw-dropping number: its remaining performance obligations (RPO)—a key indicator of future revenue from long-term contracts—soared 359% year-over-year to a staggering $455 billion.
This massive backlog is the direct result of OCI securing multi-billion-dollar contracts with the world’s most prominent AI companies, including a landmark five-year, $300 billion agreement with OpenAI and a potential $20 billion deal with Meta. As companies vie for the computing power necessary to train and deploy their AI models, Oracle has established itself as a credible and, critically, cost-effective alternative to cloud giants like Amazon Web Services (AWS) and Microsoft Azure. Oracle’s innovative “multi-cloud” strategy, which allows customers to run OCI alongside services from its competitors, has been a key differentiator, helping to drive a 1,529% increase in multi-cloud database revenue in the first quarter alone.
Further solidifying its new identity, Oracle has also announced a significant leadership transition. Co-CEOs Clay Magouyrk and Mike Sicilia have taken the helm, with former CEO Safra Catz transitioning to Executive Vice Chair. This move, as described by Chairman and CTO Larry Ellison, is designed to sharpen the company’s focus on its two core growth engines: AI-ready cloud infrastructure and industry-specific applications, both of which are central to its AI strategy.
The TikTok Deal: More Than a Partnership
For a company known for its enterprise focus, Oracle’s involvement in the TikTok deal is a game-changer. Following months of negotiations, a new framework for TikTok’s U.S. operations has been approved, with a major U.S. investor consortium, including Oracle, taking a controlling interest. This is not a simple acquisition but a complex, hybrid structure designed to address national security concerns.
At the heart of the deal is Oracle’s role as the security and cloud partner. Under the agreement, a licensed copy of TikTok’s recommendation algorithm will be brought to the U.S. and placed under Oracle’s security purview. The process is expected to involve:
- Algorithm Rebuilding: Oracle will be responsible for “retraining” the algorithm from the ground up, using exclusively U.S. user data. This is a monumental technical task that will ensure the algorithm operates independently and securely, free from any potential influence by its Chinese parent company, ByteDance.
- Data Fortification: All data from TikTok’s 170 million U.S. users will be stored in a secure Oracle cloud environment, with stringent controls and continuous monitoring to prevent unauthorized access.
- Governance Control: The new U.S. entity will be governed by a board with a six-to-one American majority, with Oracle and other key investors in control.
The effects of this deal on Oracle are profound. Beyond securing a new, multi-billion-dollar revenue stream for OCI, the partnership will significantly enhance Oracle’s reputation as a trusted provider of secure, high-performance cloud infrastructure. It effectively positions the company as a key national security asset and validates its technical capabilities on an unprecedented scale. Successfully “rebuilding” one of the world’s most powerful algorithms will be a major testament to Oracle’s AI and data management expertise.
A Bet on the Future
For investors, buying Oracle stock today is a bet on its aggressive transformation. The company’s valuation, with a forward P/E ratio around 54, reflects high expectations for its future growth, and some analysts remain cautious about the execution risks and intense competition from AWS and Azure.
However, Oracle is not sitting still. With a leadership change focused on cloud and AI, a massive and growing RPO backlog, and a strategic role in one of the most significant tech deals of the decade, the company is demonstrating a clear path to sustained growth. The TikTok deal, in particular, showcases Oracle’s ability to navigate complex geopolitical waters and secure a place at the very center of the global technology narrative. For those looking for an investment with a strong tailwind from the AI boom, Oracle’s stock presents a compelling, albeit volatile, opportunity.
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