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The artificial intelligence trade was questioned back in April. As we wrap up Q3, AI has now propelled the market to record highs for all three major U.S. indexes yet again. Oracle’s stunning post-earnings report move higher suggests that the AI trade is not abating — it is actually broadening. I want to use options to own Oracle as the cloud provider seeks to vault $1 trillion in market cap. Oracle surged nearly 40% on Wednesday after the company pointed to a ridiculous demand surge from AI firms for its cloud services, roughly $500 billion in backlog. The surge lifted its market value to $922 billion. Oracle is now one of Wall Street’s 10 most valuable companies despite not being in the “Trillion Dollar Club.” Currently, there are nine companies in the S & P 500 with a market capitalization exceeding $1 trillion. These behemoths are primarily technology firms, which dominate the upper echelons of the index due to their growth in areas like AI, cloud computing, and digital services. Oracle’s meteoric rise continues to defy expectations. This essential “cloud” juggernaut has had a cumulative 3x gain since early 2023, the enterprise software giant is rewriting the playbook for cloud transformation. Full disclosure, my Essential 40 ETF (ESN) owns Oracle and it currently sits as a top holding. However, for the balance of 2025 and for an options trade to capitalize further upside momentum in the name, I want to use options to define risk as Oracle faces some challenges that could present growth challenges. Competition intensifies as cloud investing intensifies. Amazon’s AWS, Microsoft Azure and Google Cloud continue to grow too. Arguably, they have deeper pockets and broader ecosystems too. The trade Sold ORCL $300 put expiring Oct. 17 for $17 Bought ORCL $270 put expiring Oct. 17 for $6 Bought ORCL $320 call expiring Oct. 17 for $10 This credit spread that collects $1 in premium was established when ORCL was roughly trading $299. DISCLOSURES: Kilburg is long this spread, long ORCL. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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