Oracle (ORCL) shares surged over 6% in pre-market trading, reaching approximately $190, following reports by Bloomberg that TikTok has signed binding agreements to establish a new U.S. joint venture led by Oracle. This development has alleviated investor concerns surrounding the valuation risks associated with AI technologies.
The positive sentiment from Oracle’s announcement reverberated across broader risk assets. Bitcoin (BTC) saw a notable increase, rising above $88,000, while Invesco QQQ (QQQ) futures—tracking the performance of Nasdaq-100—increased by about 0.5%. Additionally, AI-focused mining stocks experienced significant gains, with IREN climbing approximately 4%, Cipher Mining (CIFR) rising around 4%, and CoreWeave (CRWV) increasing by nearly 6%.
As part of the newly formed joint venture, Oracle is set to assume a critical role as the principal cloud infrastructure and data security provider for TikTok. The agreement entails Oracle overseeing the retraining and operational management of TikTok’s AI recommendation systems utilizing U.S.-based data. This partnership is being viewed as a clear endorsement of Oracle’s position in the AI sphere, linking its growth potential to substantial, real-world workloads.
This turn of events comes in the wake of increased scrutiny towards AI hyperscalers like Oracle and CoreWeave, which have faced pressure in recent months. Concerns about the sustainability of extensive AI infrastructure investments have prompted skepticism regarding their ability to manage heavy debt loads associated with data center expansions and ongoing project timelines.
As the markets absorb this news, attention is now shifting toward upcoming data releases, specifically the personal consumption expenditures (PCE) price index for the U.S. This follows a macro-heavy week that included significant indicators such as U.S. inflation figures, employment data, and a rate hike by the Bank of Japan (BOJ).
