Top 10 Trending Stocks and ETFs as Analyst Predicts $9 Trillion Productivity Gains Due to AI

2. Oracle Corp (NYSE:ORCL)

Number of Hedge Funds Investors: 124

In a recent interview with CNBC’s David Faber, Oracle Corp (NYSE:ORCL) co-CEO Mike Sicilia said the company wouldn’t be investing in AI if the business weren’t profitable. He said demand is “not the problem.”

“If we didn’t think this was going to be a wonderfully profitable business, we wouldn’t be in the business. I mean, obviously there are some upfront investments, right? If you’re going to build a brand new apartment building and you’ve got the first couple people that move in, you still have to pay for the whole building to be able to build that building. The difference is though, this building is sold out, right? So this building is sold out and people are lined up to move in. This is not a Field of Dreams scenario where we’re building things hoping people will come. Demand is not the problem. Supply still remains the problem.”

According to some media reports, nearly two-thirds of the company’s roughly $500 billion backlog is tied to OpenAI, highlighting serious customer concentration risks. Under the agreement between the companies, OpenAI will reportedly rent cloud infrastructure through Oracle Corp (NYSE:ORCL) Cloud Infrastructure (OCI), with costs estimated at about $60 billion annually. To finance this deal, OpenAI plans to rely on equity funding, echoing the venture capital-driven growth seen during the dot-com era.

Oracle Corp (NYSE:ORCL) shares recently fell after a media report that said the company’s AI Cloud business margins are low. However, the company said in its latest analyst day that its AI infrastructure projects are projected to generate gross margins ranging from 30% to 40%.

Headwaters Capital Management stated the following regarding Oracle Corporation (NYSE:ORCL) in its third quarter 2025 investor letter:

“The catalyst for the September AI trade was Oracle Corporation’s (NYSE:ORCL) announcement of a 5-year contract with OpenAI for $300B (implying annual contract value of $60B) to host the company’s LLMs at Oracle data centers beginning in 2027. While the market has grown desensitized to these large headline numbers, it’s useful to step back and put these figures into context from the perspective of both the magnitude of spending and return on investment. It’s easiest to start with the amount of investment that five companies are collectively spending on AI. The table below outlines CAPEX spending by the five hyperscalers and compares it with the other 495 companies in the S&P 500. In 2026, these five hyperscaler companies are expected to spend $405B of CAPEX, nearly all of this related to AI infrastructure build.

In terms of the economics around this investment, details have emerged from the Oracle-OpenAI announcement that can help investors begin to untangle the economics of these contracts. It’s easiest to unpack this from the perspective of each of the players involved.

Committed to spending $60B annually with Oracle to host the Company’s LLMs. This annual expense represents the Company’s cost of goods sold for running LLMs. OpenAI is on track to generate $13B of revenue in 2025 (Source: Reuters and the Information). So just to cover the cost of operating their LLMs on this single contract, OpenAI needs revenue to grow 4.6x in 2 years, or a +115% CAGR over the next 2 years. This is a single contract for hosting services. OpenAI has numerous other hosting contracts, implying that the company needs revenue to significantly exceed $60B just to cover the company’s total cost of goods sold…” (Click here to read the full text)