Oracle Stock Jumps 7% After Joining Investor Group to Run TikTok’s U.S. Business
However, the cloud provider’s shares have been under pressure in recent months due to concerns over its AI infrastructure spending.
Consequently, shares slumped on a report that talks over a $10 billion datacenter deal with Blue Owl Capital had reached a standstill.
Meanwhile, the deal comes at the end of a chaotic 2025 for the cloud provider, with a massive pullback in shares over concerns about its AI infrastructure spending.
Oracle to Run TikTok’s U.S. Operations
Therefore, the social media company’s U.S. division will be run by a joint venture that includes Oracle, Silver Lake, and Abu Dhabi-based MGX.
Moreover, the deal is expected to close on Jan. 22, and Oracle will be tasked with auditing and validating that TikTok follows “agreed upon National Security Terms.”
In addition, the company’s cloud-based computing centers will also house sensitive U.S. data.
Oracle Shares Up 8% This Year
However, shares are up 8% this year and have pulled back more than 20% over the last month.
Consequently, the deal comes at a time when Oracle’s shares have been under pressure due to concerns over its AI infrastructure spending.
Meanwhile, the agreement prevents the popular social platform from getting banned after President Joe Biden signed a law requiring a divestiture of the company’s U.S. unit due to national security concerns.
Oracle’s Cloud Business to Benefit
Therefore, the deal is seen as a “nice win” for the cloud company with upside potential.
Moreover, analysts at Evercore ISI called the news a “nice win” for the cloud company with upside potential.
In addition, the deal is expected to boost Oracle’s cloud business, which has been under pressure in recent months.
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