Oracle's stock price surged 6.6% as it gained the rights to operate TikTok in the United States... will establish a joint venture with China's ByteDance to participate in operations

Oracle and China ByteDance have jointly participated in the joint venture to spin off and operate TikTok's US business, and the recent continuous decline in stock prices has successfully rebounded.

On December 19th, US local time, Oracle's stock price on the New York Stock Exchange rose by 6.63% compared to the previous day, closing at $191.97. Subsequently, during after-hours trading, the upward momentum continued, reaching approximately $193 by 5 pm, an increase of about 0.6%, reflecting a positive market response. The market believes this reflects expectations that acquiring a stake in the high-growth platform TikTok's US operations could have a positive impact on Oracle's medium- to long-term profitability.

This stock price rebound occurred against the backdrop of the US government mandating the sale of TikTok's US assets on national security grounds. In response, China ByteDance decided to establish a new joint venture with US companies, involving Oracle, private equity firm Silver Lake Capital, and the UAE sovereign wealth fund MGX. This consortium will hold a 50% stake in the company responsible for TikTok's US operations, with Oracle acquiring a 15% stake.

Recently, Oracle's stock performance has been poor. The second quarter revenue announced on December 10th did not meet market expectations, and the company announced plans to expand investments in AI-related infrastructure and disclosed increased capital expenditure plans, leading to a sharp drop in stock price. On the 17th, there were reports that negotiations with Blue Cat Capital regarding large-scale data center construction had broken down, and the stock price had adjusted by more than 20% over the past month.

According to CNBC, an American financial TV network, investment bank Evercore ISI recently commented on Oracle's stock in a report: "This sharp decline instead provides investors with a long-term attractive entry point." This reflects that despite short-term negative factors, the market still believes that Oracle's AI-based cloud business and growth prospects related to TikTok remain solid.

Whether this trend can continue will depend on the future operational structure and regulatory environment of the TikTok-related joint venture, as well as the effectiveness of Oracle's AI infrastructure investments. Especially considering that political controversies over TikTok still exist within the US, the business expansion strategies of related companies may continue to be volatile in the future.