Oracle shares surged 14% to breach the $200-mark for the first time Thursday, after the company raised its annual revenue forecast, driven by strong demand for its AI-related cloud services.

Confidence in the software sector remained strong despite geopolitical tensions, even as analysts warn that U.S. President Donald Trump's tariffs could undermine Big Tech's AI investments.

Earlier this year, Oracle, whose cloud offerings help companies build their AI infrastructure, announced a joint venture called Stargate to deliver large-scale computing capabilities to OpenAI.

"Oracle's once-stodgy image levels up to 'cloud-native mage,' and the competitive map now looks less like a classic three-player real time strategy and more like a battle-royale with everyone dropping in, looking for compute loot," said Michael Ashley Schulman, partner at Running Point Capital Advisors.

Oracle expects total revenue to be at least $67 billion for fiscal 2026, CEO Safra Catz said on a post-earnings call.

The Texas-based company's cloud services quarterly revenue rose 14% to $11.70 billion. Its overall revenue of $15.90 billion beat estimates of $15.59 billion.

At least nine brokerages have raised their price target post-earnings.

Oracle trades at a forward price-to-earnings ratio of 25.86, compared to rivals Microsoft at 31.34 and Amazon at 31.80, according to data compiled by LSEG.

Microsoft's stock has gained 12.16%, while Amazon's has decreased by 2.8% so far this year.

"ORCL has entered an entirely new wave of enterprise popularity that it has not seen since the Internet era in the late 90s," analysts at Piper Sandler added.

Shares of the company were last trading at $201.38.