What is a cloud contract and why is Oracle's $30 billion deal significant?

A cloud contract is an agreement where a company like Oracle provides cloud computing services to another organization. Oracle's $30 billion deal is significant because of its massive size - it's expected to nearly double Oracle's cloud revenue. This means Oracle must rapidly build new data centers and infrastructure, creating substantial business opportunities for the companies that supply the necessary hardware and components.

What are data centers and why do they matter for these stocks?

Data centers are specialized facilities that house computer systems, servers, and networking equipment. They're the physical backbone of cloud computing and AI services. For the stocks in this theme, data centers represent a major business opportunity because building and expanding them requires massive amounts of hardware - from servers and storage devices to networking equipment and power management systems - which these companies provide.

What does "AI infrastructure" mean in the context of this theme?

AI infrastructure refers to the specialized hardware and systems needed to run artificial intelligence workloads, which are much more demanding than traditional computing tasks. This includes high-performance servers with advanced processors, specialized memory and storage solutions, and power-efficient cooling systems. The companies in this theme provide these essential components that Oracle needs to build out its AI capabilities for this major cloud contract.

What's the difference between the various types of suppliers in this theme?

This theme includes several types of suppliers across the data center value chain: server manufacturers (like Super Micro and Dell) build the actual computers that process data; semiconductor companies (like Intel) make the chips that power these servers; storage providers (like Western Digital and NetApp) create systems to store vast amounts of data; networking companies (like Ciena) provide equipment to connect everything together; and power management firms (like Vertiv) ensure these energy-intensive facilities run efficiently and reliably.

What is "Projected Profit" as shown in the stock cards?

Projected Profit refers to the estimated future earnings a company is expected to generate, typically forecasted by financial analysts. This data point helps investors understand a company's potential profitability going forward, which is particularly relevant for this theme since Oracle's major contract could significantly boost the profits of these supplier companies as Oracle increases its spending on data center infrastructure.

16 handpicked stocks

Powering Oracle's Cloud Expansion

Oracle's landmark $30 billion cloud contract requires a massive build-out of data centers and AI infrastructure. Our analysts have identified the key suppliers of servers, semiconductors, and networking hardware that are essential for this expansion and positioned to benefit directly.

Han Tan | Market Analyst

Updated 2 days ago | Published at juillet 3