Oracle Corp. (ORCL) secured a Department of War Enterprise Software Agreement on Thursday valued at up to $6.99 billion over 10 years, with an initial award of $3.31 billion over the first five-year ordering period. The contract consolidates fragmented software licensing and procurement into a single enterprise-wide agreement, with the Department projecting at least $441 million in taxpayer savings over its lifetime. Defense Secretary Pete Hegseth estimated earlier this week that the war with Iran has cost the U.S. $37.5 billion since it began in February, as AI becomes a growing national security priority for government agencies.
Shares of Oracle gained nearly 3% in after-hours trading on Thursday following the announcement. At the time of writing, the stock was up about 2.5% after-hours after closing the regular session down 4.6%. ORCL shares have lost around 38% year-to-date.
Oracle Secures $6.99 Billion Pentagon Software Contract
The contract covers Oracle software used in on-premises data centers across military branches, the U.S. intelligence community and the Coast Guard, according to a statement. The initial five-year agreement includes perpetual and subscription-based software licenses, maintenance, support and consulting services. The contract includes an unexercised option that would increase its total value to $6.99 billion.
Kirsten A. Davies, Chief Information Officer for the Department of War, said in a statement, "By fundamentally improving how we procure on-premises Oracle capabilities, we are driving at least $441 million in taxpayer savings while rapidly and effectively serving our warfighters."
Retail Traders See Broader AI Government Spending Benefiting PLTR, NOW, MSFT
On Stocktwits, retail sentiment for ORCL was 'extremely bullish,' unchanged over the past 24 hours, while message volume was 'extremely high' at the time of writing. Retail chatter on Stocktwits quickly expanded beyond Oracle's Pentagon contract, with some traders saying it reinforces a broader AI-driven government spending theme.
One retail trader identified Oracle and Palantir Technologies (PLTR) as the biggest beneficiaries of rising national security and defense AI spending. Calling the deal "only the first of many major government wins for Oracle," the trader said both Oracle and Palantir stand to gain as AI becomes a national priority and government agencies increase spending on the technology.
Another retail trader said the Pentagon contract was bullish not just for Oracle, but for the broader enterprise software sector, adding that companies such as ServiceNow (NOW), Microsoft (MSFT) and Salesforce (CRM) could also benefit from increased government spending. The trader added that Oracle's nearly $7 billion deal signals "where the market of software is going."
One trader said the stock "should have popped to 128 on the news," adding that it could still climb to $135.
FAQ
What did Oracle secure on Thursday?
Oracle secured a Department of War Enterprise Software Agreement valued at up to $6.99 billion over 10 years, with an initial award of $3.31 billion over the first five-year ordering period.
Why did Oracle stocks rise after-hours?
Oracle stocks gained nearly 3% in after-hours trading on Thursday following the announcement of the Pentagon contract, which consolidates fragmented software licensing and projects at least $441 million in taxpayer savings.
Which other companies do retail traders see benefiting from government AI spending?
Retail traders on Stocktwits said companies such as Palantir Technologies (PLTR), ServiceNow (NOW), Microsoft (MSFT) and Salesforce (CRM) could also benefit from increased government AI spending as the Pentagon contract signals broader enterprise software sector growth.
