Larry Ellison isn’t exactly what you’d call reliable. And Oracle? It just went wild.
On September 10, the tech giant released an explosive earnings report. Shares surged as much as 42% intraday before closing up 36%, adding a staggering $244 billion in market value in a single day.
That didn’t quite break Wall Street’s all-time record, though. Back on February 22, 2024, Nvidia’s blowout earnings sent its stock up 16.4%, boosting its market cap by $277 billion in one day. Still, Oracle’s move was more dramatic in percentage terms—and just as shocking to the market.
According to filings, Larry Ellison, 81, Oracle’s cofounder and chairman, owns 1.16 billion shares. At the stock’s intraday high, his net worth spiked by nearly $120 billion, reaching $414.8 billion—enough to briefly pass Elon Musk and take the crown as the world’s richest person. The title only lasted a few hours before Oracle’s stock cooled, but it may not be the last shake-up we see among the billionaire rankings. Bill Gates, once the perennial No. 1, fell out of the top ten yesterday for the first time in 24 years.
Outside of Oracle, Broadcom, and Nvidia—the “picks and shovels” of the AI boom—Wall Street’s broader performance has been muted. Apple even slipped 3.2%. Oracle, of course, has always been a master storyteller when it comes to hyping its future. And despite the flashy numbers in this report, not everything looked flawless once you read the fine print.
Oracle’s Big Bet on AI
So why did Oracle’s stock rip higher? The key number: $455 billion in remaining performance obligations (backlog of unfilled contracts) as of August 31, up 359% year over year. Just in Q1, new orders added $317 billion to that pile—blowing past expectations and setting investors on fire.
Revenue rose 9% to $14.06 billion, slightly missing forecasts of $14.1 billion. Adjusted EPS came in at $1.47 versus the expected $1.48. Even next quarter’s guidance disappointed—management expects $14.3 billion in revenue, below the $14.65 billion Wall Street was looking for.
So where’s the excitement? The cloud infrastructure division, Oracle’s fastest-growing unit, saw revenue jump 52% to $2.4 billion. CEO Safra Catz said this business will grow 77% this fiscal year to $18 billion. Ellison added that Oracle cloud is powering “some of the world’s most important generative AI models,” claiming it’s faster and cheaper than competitors.
The real catalyst: a $300 billion cloud capacity deal with OpenAI, set to begin in 2027 and span about five years. That averages out to roughly $60 billion a year—an eye-popping number for a company that currently generates only about $12 billion annually in revenue.
Ellison has already sketched out a story arc: $18 billion this year, $144 billion in 2030. It’s an unusually long-term forecast by U.S. market standards. Nvidia, for example, rarely looks beyond the next quarter or year.
The catch? Compute spending is notoriously cyclical. You can’t just assume smooth, linear growth. Oracle’s projection feels more like faith than finance.
Déjà Vu: Cisco in 2000?
If this sounds familiar, it should. Remember Cisco at the peak of the dot-com bubble? In 2000, it briefly became the world’s most valuable company—only to spend the next two decades digesting that valuation. Oracle’s critics wonder if today’s rally is setting up a similar story.
After all, OpenAI is still losing money, and it’s far from clear how sustainable these massive cloud deals will be. Investors right now are effectively paying upfront for a contract that doesn’t even kick in until two years from now.
Markets can stay irrational longer than skeptics expect, but history suggests gravity always returns.
The Larry Ellison Factor
Then there’s Ellison himself—a legend, a showman, and, to some, not the most dependable of characters.
Ellison cofounded Oracle in 1977, building it into the world’s largest database software company with aggressive sales tactics and relentless competition. Along the way, he’s courted controversy: blasting rivals, suing competitors, and making larger-than-life predictions.
He’s also flamboyant in his personal life. Armani suits, private jets, yachts, mansions, multiple marriages, endless girlfriends—Ellison has always lived large. He once dismissed IBM execs as “a bunch of idiots,” mocked Bill Gates as unimaginative and tasteless, and even half-joked about blowing up Microsoft’s headquarters.
In 1999, he promised Oracle’s revenue would grow tenfold in five years. The dot-com crash arrived less than a year later.
Oracle has also faced its share of scrutiny. In 2001, it settled a shareholder lawsuit over accounting practices after Ellison himself dumped nearly $900 million in stock. In 2016, a former finance manager accused the company of pressuring staff to manipulate numbers to boost earnings. The suit was dismissed.
Whether these controversies matter for Oracle’s future is anyone’s guess. At 81, Ellison’s longevity at the helm is another open question.
The Bottom Line
Was Ellison really the world’s richest man for a few hours? Yes. Does that mean Oracle is the next Nvidia—or the next Cisco? That’s up for debate.
If you bought in early, you’re celebrating right now. If you missed it, the smart move may be to keep a cool head. Betting on a revenue “story” that won’t fully play out until 2030 is the kind of thing that can keep investors awake at night.