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Oracle Expands Cloud-Based GPU Access
Oracle (NYSE: ORCL) has launched a cloud-based infrastructure business that rents access to Nvidia’s GPUs, addressing the growing demand for high-performance computing. As of September 22, Oracle’s stock price has surged 97% year-to-date, significantly outpacing Nvidia’s 27% gain, driven by a record $455 billion in remaining performance obligations from its cloud infrastructure division.
Market Strategy and Clientele
By offering GPU-as-a-service through its Oracle Cloud Infrastructure (OCI), the company is targeting major clients like OpenAI and ByteDance. This model allows enterprises flexibility in scaling workloads without the constraints seen with other platforms like Microsoft Azure or Amazon Web Services. As of now, Oracle’s forward price-to-earnings (P/E) ratio stands at 45, marking its highest valuation during the AI boom.
Future Considerations
Despite the momentum, concerns remain about Oracle’s ability to monetize its infrastructure effectively, especially as its investments impact free cash flow. Analysts advise caution in chasing Oracle stock at its current valuation, questioning the sustainability of its growth in a competitive market.
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