Oracle Stock Jumps on TikTok Deal Speculation

President Donald Trump indicated that an agreement had been reached regarding TikTok. (Mario Tama/Getty Images)

Key Points

About This Summary

• Oracle’s stock rose amid speculation it may be involved in a U.S.-China deal regarding TikTok.
• Trump hinted at a deal for a “certain” company popular with young people, while Treasury Secretary Bessent confirmed a TikTok deal framework.
• Last week, Oracle stock jumped after first-quarter earnings. Citi Research upgraded shares, driven by confidence in its AI business.

Oracle stock climbed on Monday on speculation that the software company could be involved in the deal between the U.S. and China over TikTok.

On Truth Social, President Donald Trump indicated that an agreement had been reached regarding the video-sharing app. “A deal was also reached on a ‘certain’ company that young people in our Country very much wanted to save. They will be very happy!” Trump wrote on Monday.

Treasury Secretary Scott Bessent, who has been negotiating with Chinese officials, provided more clarity, saying that there was “a framework for a TikTok deal.” He declined to discuss the commercial terms. “It’s between two private parties, but the commercial terms have been agreed upon,” Bessent said.

National security concerns have long surrounded TikTok parent ByteDance, which is headquartered in Beijing. U.S. lawmakers sounded the alarm about ByteDance’s possible connections to the Chinese Communist Party and its access to user data, fears that were stoked further when multiple whistle-blowers spoke out against the company.

In April 2024, President Joe Biden signed a law giving ByteDance nine months to divest from TikTok or face a ban in the U.S. Enforcement of the ban was left to Trump, who extended the deadline.

Oracle has frequently been discussed as a possible partner in a TikTok sale, with Trump saying earlier this year that he was open to founder and CEO Larry Ellison buying the video-sharing app.

Oracle stock climbed 2.9% to $300.60 on Monday, snapping a two-day losing streak on investor speculation.

Shares of the software company rose sharply last week after Oracle posted fiscal first-quarter earnings. The sharp gains propelled Ellison to the position of the world’s richest person, surpassing Tesla CEO Elon Musk.

While the first-quarter print was mixed, it revealed a significant increase in Oracle’s backlog for contracted work. Revenue surged to $455 billion in the quarter, up from $138 billion sequentially, on the back of four new multibillion-dollar contracts.

Citi Research analysts upgraded Oracle to Buy from Neutral and boosted their price target to $410 from $240 in a note on Thursday, writing that “historic” first-quarter bookings gave the firm confidence in the durability and profitability of Oracle’s AI business.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com