Oracle shares jumped. The market now has hope for a new reason to rally

IT giant Oracle's shares rose sharply in trading on Tuesday before slowing down, thanks to investor hopes that control of US-based TikTok will pass to it. The U.S. presidential administration announced a new commercial agreement between Washington and Beijing that would see TikTok in the U.S. move under the control of a U.S. owner to remove national security risks. Tuesday's rise in the stock followed a surge in Oracle's stock price last week after its report.

Shares of Oracle rose by 5.9% to almost $320 in trading on Tuesday. But then the rate of appreciation slowed to about 1%: the price fell to $305 at the time of publication of this text.

The surge in investor optimism was due to US President Donald Trump's hints that a tentative agreement has been reached between the US and China over video service TikTok, Barron's said. Trump told Truth Social on Monday that the countries had agreed on the fate of "a certain company that the young people in our country really wanted to save."

TikTok is now owned by China's ByteDance, but Washington is demanding the sale of the social network's U.S. business and threatens to block it if it does not comply. CBS News sources told CBS News on September 15 that Oracle is part of a consortium of companies that could ensure TikTok continues to operate in the U.S. if an agreement between Washington and Beijing is signed. Oracle is regularly mentioned as a potential partner or buyer, and Trump has repeatedly said he is open to such a solution, Barron's recalls.

"This could reinforce the positive backdrop that has built up around Oracle in recent weeks as the company's shares have started to surge on the back of its position as the new beneficiary of the AI boom," AJ Bell investment director Ross Mould said in a statement to Barron's.

Oracle, the White House and TikTok did not respond to Barron's request for comment. U.S. Treasury Secretary Scott Bessent on Monday specified that TikTok's business in the U.S. will be transferred under the control of the U.S. owner to remove risks related to national security, Barron's writes. At the same time, Bessent did not specify whether it is about the sale of assets.

Oracle shares have already added 83% since the beginning of the year, including a 36% gain last week after the company reported a sharp jump in contracts signed but not yet executed, to $455 billion from $138 billion a quarter earlier. This points to strong demand for Oracle's cloud services.

Jefferies analysts in a Sunday note called Oracle a "new force in the cloud wars" that rivals players such as Microsoft, Alphabet and Amazon, Barron's reported. Last week, following Oracle's report, Jefferies raised its target price on the company's stock from $270 to $360, which at the time implied a further rise of about 10 percent.

Jefferies expressed doubts about how the company intends to fund a massive buildout of AI data centers. However, the pressure on the company in the short term is balanced by its huge contract portfolio and accelerating demand for AI capacity, analysts said.

This article was AI-translated and verified by a human editor