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Oracle Pauses After AI-Fueled Surge Toward $1 Trillion Valuation

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Oracle shares fell 4% on Thursday, cooling off after a record-breaking 35.9% rally the previous day that had pushed the company’s market capitalization to $933 billion, edging it closer to the trillion-dollar elite. If losses hold, Oracle’s valuation will settle near $894 billion.

Ellison’s Billionaire Climb

The surge has also boosted co-founder Larry Ellison’s fortune to $371.7 billion, putting him within striking distance of Elon Musk ($441.2 billion) for the title of world’s richest person, according to Forbes.

What Fueled the Rally

Oracle’s rise has been powered by multi-billion-dollar AI cloud deals as companies race to secure massive computing power to lead in the AI arms race.

  • On Tuesday, Oracle reported its order backlog was on track to hit $500 billion.

  • The Wall Street Journal revealed OpenAI signed a $300 billion cloud deal with Oracle, one of the largest in history.

Market View

Analysts see the pullback as a breather.

  • Dennis Dick, chief strategist at Stock Trader Network: “A bit of buyer exhaustion here. I think the ‘buy the dip’ crowd is likely to re-emerge. The guidance was so incredible, hard to think that this story is over.”

Oracle’s stock has nearly doubled in 2025, making it one of the top S&P 500 performers, outpacing even the Magnificent Seven tech giants.

Valuation Check

  • Stock price: $314.45

  • Median price target: $342 (approx. +9% upside, LSEG data)

  • Forward P/E ratio: 45.3 vs. Amazon (31.3) and Microsoft (31).

Oracle’s premium valuation reflects investors’ conviction that its AI-powered cloud expansion will continue to drive outsized growth, even as short-term pullbacks test market momentum.

FDA to Review AI-Powered Mental Health Devices in November Advisory Panel

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The U.S. Food and Drug Administration (FDA) announced it will convene its Digital Health Advisory Committee (DHAC) on November 6 to evaluate the growing category of AI-enabled digital mental health tools.

The meeting will explore how technologies such as chatbots, virtual therapists, and digital therapeutics could help bridge the nation’s mental health care gap, while also assessing the risks of safety, efficacy, and oversight.

Why It Matters

The U.S. faces a shortage of mental health professionals, and AI-driven platforms promise scalability, accessibility, and rapid intervention. But the speed of innovation has left regulators searching for frameworks to ensure these devices are trustworthy and clinically sound.

FDA’s Approach

  • The DHAC will advise the agency on regulatory pathways for AI/ML tools, remote monitoring, digital therapeutics, and medical device software.

  • The panel discussion is expected to help the FDA identify key areas of concern such as data privacy, bias in algorithms, and standards for clinical validation.

  • The FDA has already begun experimenting with AI in its review processes, reflecting its broader shift toward digital oversight.

Next Steps

  • The FDA has opened a public docket for comments ahead of the session.

  • Supporting materials will be made available at least two business days before the meeting.

The November discussion could shape how future AI mental health devices are classified, monitored, and approved in the U.S., setting an early precedent for regulation in this rapidly expanding sector.

Alibaba to Raise $3.2 Billion via Convertible Bond for Cloud and Global Expansion

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Alibaba announced Thursday it will raise $3.2 billion through the sale of a zero-coupon convertible bond, the largest such deal this year according to Dealogic, surpassing DoorDash’s $2.75 billion issue in May. The move underscores the Chinese tech giant’s push to scale its cloud computing and international e-commerce operations.

Use of Proceeds

  • ~80% will go toward data center expansion, tech upgrades, and cloud service improvements.

  • The remainder will be invested in boosting e-commerce efficiency and market presence.

Bond Terms

  • Convertible into Alibaba’s U.S.-listed shares.

  • Conversion premium: 27.5%–32.5% above U.S. stock price.

  • Maturity date: September 15, 2032.

Market Reaction

  • Hong Kong shares rose 2.3% to HK$146.1, reversing earlier losses and moving in line with the Hang Seng Index.

  • U.S.-listed shares fell 2.2% on Wednesday.

  • Year-to-date: Hong Kong stock up 71.6%, U.S. stock up 71.1%.

Cloud and AI Strategy

Alibaba is one of China’s largest AI investors, pledging 380 billion yuan ($53.4 billion) over three years. CEO Eddie Wu recently highlighted AI as central to cloud revenue growth, saying: “We are seeing an increasingly clear path for AI to drive Alibaba’s robust growth.”

The company has raised capital aggressively in recent years:

  • $1.5 billion via exchangeable bond in July.

  • $5 billion convertible bond in May 2023.

Broader Market Context

Convertible bonds are seeing strong momentum in Asia-Pacific. Issuance this year totals $27.8 billion, just shy of last year’s $28.7 billion, marking the strongest run in three years.

Alibaba’s fundraising aligns with a surge in Hong Kong’s equity capital markets, where investors favor convertible bonds for their equity upside potential alongside principal repayment guarantees if conversion is not exercised.