Oracle Shares Advance on Reported $20 Billion AI Cloud Deal Talks with Meta

Oracle Corporation (NYSE: ORCL) experienced a 4.4% surge in its stock price on Friday, reaching a session high, following reports of a potential multiyear cloud computing agreement with Meta Platforms (NASDAQ: META). The proposed deal, estimated at approximately $20 billion, would position Oracle to provide crucial computing power for Meta's extensive artificial intelligence (AI) model training and deployment needs.

The Event in Detail

Bloomberg reported that Oracle is in advanced discussions with Meta for this significant cloud services contract. Sources familiar with the negotiations indicate the agreement would involve Oracle's Oracle Cloud Infrastructure (OCI) supporting Meta's AI ambitions, including its Llama models and AI agent development. While the total commitment amount and specific terms are subject to change, the potential scale of the deal signifies a major win for Oracle's expanding cloud business. This development follows a period of robust growth for Oracle, which recently reported a substantial increase in its remaining performance obligations (RPO) and saw its stock reach an all-time high due to strong demand for its cloud offerings.

Analysis of Market Reaction

The positive market reaction to Oracle's stock reflects heightened investor confidence in the company's strategic pivot towards becoming a dominant force in the AI cloud infrastructure market. The prospect of a $20 billion contract with a tech giant like Meta validates Oracle's aggressive investments in specialized, high-performance computing tailored for demanding AI applications. This potential deal reinforces the narrative that Oracle is successfully capitalizing on the industry-wide surge in AI development, offering a viable alternative to traditional hyperscalers. The perceived ability to secure such a large-scale agreement suggests that Oracle's offerings are competitive in terms of both performance and cost efficiency, as highlighted by claims of OCI outperforming rivals like Amazon Web Services (AWS) and Microsoft Azure in price-performance for AI training.

Broader Context and Implications

This potential partnership underscores the escalating demand for robust cloud infrastructure necessary to power the next generation of AI models. Oracle's expansion into this sector is marked by concrete financial commitments, with CEO Safra Catz projecting cloud infrastructure revenue could reach $144 billion by fiscal year 2030. The company's cloud revenue grew by 52% in Q2 2025, and its stock has advanced over 85% in 2025, reflecting strong investor belief in its AI-driven strategy. Oracle's approximately $138 billion in remaining performance obligations further illustrates the secured future revenue streams. The company's strategic alliances, including partnerships with OpenAI (via the Stargate initiative) and NVIDIA, complement its efforts to build out AI-optimized data centers. For Meta, this multiyear deal would diversify its cloud computing providers, enhancing its access to crucial compute power to accelerate its AI development roadmap.

"With Oracle's AI database, it's setting itself up to be the underlying data infrastructure for enterprise AI initiatives."

This sentiment from an industry analyst highlights Oracle's foundational role in the evolving AI ecosystem. The deal also intensifies competition within the cloud sector and is expected to boost demand for AI semiconductors, creating broader investment opportunities across the AI supply chain.

Looking Ahead

The finalization of the reported $20 billion deal between Oracle and Meta will be a key factor to monitor in the coming weeks. Any official announcement or detailed terms will likely influence Oracle's stock trajectory and investor sentiment further. Beyond this specific deal, market participants will continue to watch Oracle's progress in securing additional multi-billion-dollar customers for its OCI services, as well as its ongoing capital expenditures in data center expansion and NVIDIA GPU deployments. The broader implications for the AI infrastructure market, including competitive dynamics among cloud providers and the pace of AI model development by companies like Meta, will remain central themes for investors in the technology sector.