Oracle expects its Oracle Cloud Infrastructure business to generate over $500 billion in booked revenue. The company anticipates signing several multi-billion-dollar clients soon. Oracle highlights the smooth integration for customers, which allows them to connect all databases to advanced AI models like ChatGPT, Gemini, and Grok. These AI models are uniquely available in the Oracle Cloud environment.

Stock Surge

After this news, Oracle’s stock jumped by 27% in after-hours trading. This sharp 27% increase has caused implied volatility to reach multi-year highs. As a result, purchasing basic calls or puts has become very costly. We suggest that traders should not chase this initial jump and should instead focus on selling options to take advantage of this inflated premium. With options being expensive, we see a chance to sell out-of-the-money put credit spreads that expire in the next three to six weeks. This strategy benefits if the stock remains above a certain level, allowing us to earn premium as volatility decreases. Historical data from similar earnings surges in the tech sector, like those seen with NVIDIA throughout 2024, often show a period of sideways trading after the initial jump. For those who are more positive about the stock, long-dated call debit spreads offer a more cost-efficient way to gain from further gains. This method reduces upfront cash needed and lessens the impact of volatility if the stock’s momentum slows. The company’s expectation of signing more multi-billion-dollar deals suggests this momentum may continue beyond the initial announcement.

Competitive Market

It’s important to consider that, as of mid-2025, Oracle’s cloud market share is still under 5%. This is significantly less than market leaders Amazon Web Services and Microsoft Azure, which together hold over 55% of the global market. This tough competition means capturing that projected $500 billion in revenue will be challenging. This significant news comes as the Federal Reserve has maintained interest rates at 3.75% for the last two quarters, creating a steady but cautious environment for stocks. Meanwhile, U.S. unemployment rose slightly to 4.1% last month, a figure we are monitoring closely. Any changes in this stable economic setting could dampen enthusiasm for Oracle’s ambitious growth plans. Create your live VT Markets account and start trading now.

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