Larry Ellison made something like $120 billion by lunchtime on Wednesday. How’d you do?
I looked, and dictionary-thesaurus sites were short on superlatives sufficient to capture the scope of the AI-inspired, mid-week rally in shares of Oracle.
As most of you know, I don’t indulge in a lot of single-stock coverage outside of big bank results and Magnificent 7 earnings releases, but it was impossible to ignore what might very fairly be described as one of the more spectacular single-session gains for a major company in living memory.
Just so we’re all on the same page here: Oracle’s not a small enterprise. This is a storied company and headed into Tuesday evening’s earnings report, it sported a market cap of $680 billion, give or take. I suppose you could argue that’s small potatoes at a time when Nvidia’s market cap swings by tens or even hundreds of billions almost as a matter of course, but nobody can argue that Oracle’s somehow an inconsequential organization.
I belabor that point because it’s pretty damn rare that consequential, publicly-traded organizations rally by 40% in a single day. And that’s exactly what Oracle did Wednesday. The single-session gain was on track to be the largest in over 30 years. The four-session rolling gain was an absurd 51%.
As the figure shows, this is one of those cases where the chart really isn’t worth drawing. It’s unprecedented. Again: This is a blue-chip company rallying 40% in a day.
You don’t need a lot of complicated analysis. This is just another manifestation of the AI frenzy. The company’s bookings/backlog almost quintupled YoY to nearly half a trillion. The implication (one implication) is that Safra Catz has the cloud business growing faster than Alphabet’s. Oracle’s vying for pole position in the provision of AI cloud compute.
The press release was a dream come true for investors champing at the bit to bid up companies with a claim on AI-cloud hybrid revenue. Between them, Catz and Ellison threw red meat to that pride of greedy lions, describing “an astonishing quarter” defined by rapidly expanding demand for the company’s cloud infrastructure.
Catz teased a “large upward revision” to the company’s “overall financial plan” next month, and Ellison touted a quadruple-digit increase in “MultiCloud database revenue” from a veritable VIP list of hyperscalers who, as part of a “revolutionary new service,” will be able to layer any LLM they choose “directly on top” of Oracle’s infrastructure. Bottom line: “Oracle is off to a brilliant start” in its new fiscal year and cloud demand’s set to increase “dramatically” for years to come.
In case all of that wasn’t enough to get the shares moving (and it was more than enough), Ellison did his best Jensen Huang impression: “AI Changes Everything.” I don’t know if that’s a company slogan or the name of a famous AI paper I’m not aware of or what, but that’s verbatim from the press release, which is to say Oracle capitalized the words “changes” and “everything,” neither of which is a proper noun.
Anyway, Larry — who was already among the filthiest of the filthy rich — is now the richest person on Earth, worth something like $400 billion. Congratulations, Larry. You now have bragging rights over Elon Musk, and unlike Elon, you’re still in the good graces of America’s first authoritarian president, which means you’re free to get even richer.
But don’t get too comfortable at the top. Because Tesla’s board just floated a $1 trillion long-term pay package for Musk. All he has to do is make the company eight and a half times more valuable than it is(n’t) today. If he somehow achieves that, his stake in Tesla would be worth — and this is just my back-of-the-envelope math — $14 gazillion.
I can remember the Next Biggest Billionaire conversation from the late 90s. Basically, Bill Gates was #1 with a bullet, and there was all this talk about who the ultimate contender was.
Stalwarts like Warren Buffet inevitably got a mention, but they weren’t seriously considered on account of not being in tech. Bezos was always in the conversation, but only as a dark horse. Amazon hadn’t yet made a profit. Michael Dell was usually the front runner. The real Market-cap Olympics contenders (apart from Microsoft) were heavy weights like Cisco, Dell, and Yahoo!.
As the biggest shareholder of Oracle, Larry Ellison was usually on the list, but it always felt like he was just filler. Most people couldn’t tell you what Oracle did. Those in the know would tell you: databases. That’s what Oracle did. Databases.
ORCL’s move is nice for the portfolios, but some (much?) of ORCL’s guided revenue super-growth is from OpenAI; OpenAI just raised its guided loss through 2029 to $115BN (+$80BN from prior guid!). Sure, Altman says revenue will be $200BN in 2030, but what is the risk that OpenAI misses its guidance, or can’t find enough investors to fill that $115BN hole? In that case, how much of ORCL’s guided revenue is at risk? Well, it probably doesn’t matter for now if we’re looking at a melt-up into year-end.
I wouldn’t describe myself as deeply connected with the almost daily iterations of the evolving LLM landscape, but I try to keep up.
OpenAI is viewed as being in the lead because of their first mover advantage. However, in my opinion, Anthropic is kicking their butt. GPT-5 is a cost optimized solution speaking to OpenAI’s inability to turn a profit. They are not really innovating to drive growth but optimizing to improve revenue. It’s way too early for them to be doing that, these tools haven’t reached that level of maturity. Meanwhile, Anthropic is releasing features like they have a Genie. Yesterday they released a new feature that can create spreadsheets and slide decks from randomly input files. Microsoft hasn’t even figured out how to do this well and they own the lions share of digital office productivity tools!
All of this is not even engaging on the superiority of their code tools. The way Claude Code is able to plan, document, and implement project execution is incredibly empowering. I was able to build 4 new apps in a month purely through vibe coding on a $100 a month plan. The ROI on that is unbelievable.
ORCL started a big RIF last month, per rumors, and now they announce a 2026 restructuring with $1.6BN cost being mostly severance payments – so its a bigger RIF.
Someone making $100B IN A DAY once again highlights the absurdity of our existence. What the hell is even happening?
For context, that’s over a MILLION times what the median household makes in a year.
Well, at the close he only made $90BN (guess) so that’s alright then . . .
But we (the royal we) can’t figure out how to house and feed everyone who lives in this country.
Gee, I wonder why not?