Oracle shares surged 5.13% during Monday's regular trading session, extending a recovery that began after the stock hit a 52-week low earlier last week. The gain added to a pre-market advance of more than 3% and came amid broad-based strength in the systems software sector, where peers including Microsoft, ServiceNow, and Palo Alto Networks also traded higher.

The rally was fueled by renewed investor focus on Oracle's recently secured landmark contract with the U.S. Department of Defense, valued at up to approximately $70 billion over a maximum period of 10 years. The agreement, which carries a five-year base value of $3.31 billion and a total potential value of $6.99 billion if all options are exercised, aims to consolidate the Pentagon's fragmented software procurement systems and enhance cross-agency coordination. Although the stock initially reversed lower on the announcement amid broader concerns over AI capital expenditure returns and credit risk, market participants have since reassessed the contract's long-term significance, driving the rebound.

The positive sentiment came despite lingering worries about Big Tech's heavy spending on AI infrastructure. Oracle had been flagged as a stress case in credit markets after its free cash flow turned negative, but the defense contract is seen as a strategic win that could stabilize its revenue outlook and offset some of the capital-intensive pressures facing the sector.