Larry Ellison, the founder of Oracle, celebrated his 80th birthday recently amidst the company’s rising success. Unlike other legacy tech giants like Intel and Cisco, Oracle has been thriving in a world where artificial intelligence is increasingly dominating the landscape. With a recent quarterly earnings report exceeding expectations, Oracle’s stock witnessed an 11% surge followed by more gains in the subsequent days, closing at a record high of $157.10. This success has transformed Oracle into a Wall Street darling, with double-digit growth after each of its quarterly reports this year, mostly driven by its cloud businesses.
Oracle shares have soared by 49% this year, making it the second-best performer among large-cap tech stocks, trailing only behind AI chipmaker Nvidia. In contrast, companies like Intel and Cisco have struggled, with Intel losing 60% of its value and Cisco down by almost 3%. Oracle’s recent financial success has also significantly benefited Larry Ellison, whose net worth has surged to $192 billion, making him one of the wealthiest tech moguls, just behind Elon Musk and Jeff Bezos.
Despite its recent success, Oracle’s revenue growth has remained fairly steady, with an 8% increase in the latest quarter, reaching $13.31 billion. The company’s CEO, Safra Catz, expects the growth rate to be between 8% and 10% for the upcoming period. Oracle has had sporadic double-digit revenue growth in the past, with analysts predicting a more sustainable trajectory of growth in the foreseeable future. This optimism is reflected in the market with analysts upgrading their ratings for Oracle from hold to buy.
Cloud Business Growth
Oracle’s cloud business has been a significant growth driver, with revenues in the unit surging by 45% to $2.2 billion in the latest quarter. Although behind competitors like Amazon Web Services, Microsoft, and Google in cloud infrastructure market share, Oracle has been forging partnerships with them. Ellison’s recent collaboration with Microsoft and making Oracle’s database available for AWS customers indicates a shift towards cooperation in the tech industry, offering more flexibility and options for clients.
As Oracle continues to evolve and expand its cloud offerings, investors are optimistic about the company’s growth prospects. With increasing competition and rapid technological advancements in the industry, Oracle’s ability to adapt and innovate will determine its future success. Ellison’s focus on AI and his vision for a password-free future reflects the company’s commitment to staying ahead of the curve and embracing cutting-edge technologies. As Oracle navigates through the ever-changing tech landscape, its partnerships, investments in cloud services, and commitment to innovation are key factors that will drive its success in the years to come.
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