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Oracle’s Record-Breaking Surge Highlights AI Trade’s Dominance in Markets

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Wall Street’s AI-driven rally hit another milestone this week as Oracle’s shares soared 36%, pushing its market value to $922 billion and reinforcing artificial intelligence as the defining force behind 2025’s equity boom.

Oracle’s AI Catalyst

  • The surge followed Oracle’s disclosure of four multi-billion-dollar cloud contracts driven by demand from AI companies such as OpenAI and xAI.

  • The move places Oracle among the 10 most valuable U.S. companies, overtaking names like Eli Lilly, JPMorgan, and Walmart.

  • Oracle’s stock has nearly doubled in 2025, making it one of the top S&P 500 performers.

AI Trade in Context

  • Nvidia, Microsoft, Alphabet, Amazon, Palantir, Broadcom, Meta Platforms, and Oracle together have accounted for about half of the S&P 500’s 11% gain this year.

  • Nvidia remains the world’s most valuable company at $4.3 trillion, despite a minor pullback after its August sales forecast.

  • The technology sector overall is up 16% year-to-date, with forward P/E ratios at 28x earnings — well above the 10-year average of 22x.

Broader Market Impact

  • AI-linked stocks now dominate trading activity: 9 of the 10 most traded companies this week were AI-related (Apple being the lone exception).

  • The enthusiasm has spread beyond tech: utilities and industrials like GE Vernova, Constellation Energy, and Vistra are gaining on expectations of higher energy demand to fuel AI infrastructure.

  • This has lifted the S&P 500’s overall valuation to 22x forward earnings, near a four-year high.

Investor Sentiment

Despite concerns about overheating, analysts see Oracle’s surge as proof that capital continues flowing heavily into AI plays.

“I was very surprised by the magnitude of the (Oracle) jump and it shows there is still a lot of life left in the AI trade,” said Chuck Carlson of Horizon Investment Services.

OpenAI and Nvidia to Back Billions in UK Data Center Investments – Bloomberg

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OpenAI and Nvidia plan to announce major support for billions of dollars in UK data center projects next week, according to a Bloomberg report citing people familiar with the matter. The initiative will be carried out in partnership with London-based Nscale Global Holdings.

High-Profile Visit

  • Sam Altman (OpenAI CEO) and Jensen Huang (Nvidia CEO) are expected to be in the UK as part of a U.S. tech delegation coinciding with President Donald Trump’s visit.

  • Several other U.S. firms are also preparing to unveil tens of billions of dollars in UK investments during the trip.

Strategic Importance

The planned data center buildout reflects soaring demand for AI and cloud infrastructure, as companies worldwide race to secure computing power for advanced machine learning applications.

Silence From Stakeholders

  • Nvidia declined to comment.

  • OpenAI, Nscale Global, the White House, and Downing Street did not immediately respond to Reuters requests for comment.

If confirmed, the pledge would mark one of the largest U.S. tech investments in the UK’s digital infrastructure, reinforcing Britain’s bid to position itself as a hub for AI innovation and cloud expansion.

Alibaba and Baidu Turn to In-House Chips for AI Training Amid U.S. Restrictions

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Alibaba and Baidu have begun using their own internally designed chips to train AI models, partly replacing Nvidia’s processors, according to a report from The Information. The move signals a major shift in China’s AI development strategy, as U.S. export controls continue to restrict access to advanced American-made semiconductors.

Key Developments

  • Alibaba has used its homegrown chips since early 2025 to train smaller AI models.

  • Baidu is testing its Kunlun P800 chip to train new versions of its Ernie AI model.

  • Both companies still rely on Nvidia for their most advanced models but are working to reduce dependence.

Impact on Nvidia

Nvidia remains dominant in AI training hardware, but China accounts for a large share of its business. The firm’s most powerful U.S.-approved chip for China, the H20, lags behind the H100 and Blackwell series — but still outperforms most Chinese alternatives.

However, employees cited by The Information said Alibaba’s latest AI chip matches the performance of Nvidia’s H20, narrowing the gap between U.S. and Chinese hardware.

An Nvidia spokesperson responded: “The competition has undeniably arrived … We’ll continue to work to earn the trust and support of mainstream developers everywhere.”

Geopolitical Pressure

  • U.S. export restrictions have pushed Chinese companies to accelerate domestic chip design.

  • Beijing has urged firms to rely on home-grown semiconductor technology as part of its strategic autonomy push.

  • Nvidia CEO Jensen Huang recently said talks with the White House over permission to sell a less advanced next-gen chip to China will take time.

According to the report, Nvidia has agreed to give the Trump administration 15% of China sales of its H20 chips in exchange for continued export licenses.

The Bigger Picture

China’s pivot toward domestic AI chips marks both a risk to Nvidia’s China revenues and a milestone for Chinese chipmakers, who are beginning to close the performance gap under intense geopolitical and economic pressure.