Larry Ellison Completes Stellar Year as Oracle's Stock Sees Major Rise

Larry Ellison, the co-founder of Oracle, is enjoying a remarkable year. Oracle's stock has surged by 63% in 2024, marking its greatest performance since the dot-com boom of 1999. This impressive rally has significantly boosted Ellison's wealth by over $75 billion.

As of now, Ellison's net worth exceeds $217 billion, placing him third among the richest individuals globally, trailing only Tesla's Elon Musk and Amazon's Jeff Bezos. In comparison, the S&P 500 index has increased by 27% in the same year.

At 80 years old, Ellison stands out in the tech industry where many billionaire founders are much younger. For instance, Meta's Mark Zuckerberg, who has also seen substantial growth in his wealth, is just 40 years old.

Despite his age, Ellison seems to have found a new lease on life, both personally and professionally. His personal life has attracted attention, with reports of him dating a 33-year-old woman. Professionally, Ellison displayed enthusiasm during a meeting with analysts, where he casually mentioned dining with Musk and his son.

The major boost to Ellison's wealth is attributed to Oracle's adaptation to the current artificial intelligence (AI) trend. Oracle has effectively used its cloud infrastructure technology, which has made its databases more accessible to businesses.

In June, OpenAI, the creator of ChatGPT, announced that it would utilize Oracle's cloud infrastructure. Furthermore, Oracle has also begun collaborating with Meta for business initiatives.

Startups, often leaning towards larger players like Amazon Web Services, have begun to engage with Oracle as well. For example, Genmo, a video generation startup, employs Oracle's cloud to train its AI models using Nvidia graphics processing units (GPUs).

According to Genmo's CEO, Oracle offers a distinct product with GPU computing that sometimes outperforms servers that rely on virtualization technologies.

However, in its latest earnings report, Oracle did fall short of analyst expectations and provided a forecast that was also below market predictions. This led to a significant drop in stock price, resulting in its worst day of trading for 2024, eroding some of its earlier gains.

Despite this setback, Ellison remains optimistic. He emphasized that Oracle Cloud Infrastructure trains leading generative AI models more quickly and cost-effectively than other cloud providers.

For its fiscal year ending in May, Oracle is anticipated to experience a revenue growth of about 10%, representing its second strongest year since 2011.

Responding to challenges, Genmo has established a direct line of communication with Oracle sales and engineering teams, enabling improved reliability and performance for their services.

Future Projections

At an analyst gathering in Las Vegas, Oracle executives provided a positive outlook for the next three years. Doug Kehring, Executive Vice President, projected that Oracle would exceed $66 billion in revenue for the 2026 fiscal year and $104 billion by fiscal 2029, suggesting a growth acceleration.

Ellison humorously remarked on the ambitious targets, indicating confidence in achieving these milestones. For 2023, Oracle's revenue was close to $50 billion, and analysts see the new forecasts as stellar.

Although Oracle continues to lag in cloud infrastructure market share, it remains a key player in the database sector with a 17% market share according to Gartner.

To capture expansion opportunities, Ellison has recently engaged in collaborations with major companies such as Microsoft and Google, allowing Oracle databases to be used via their cloud platforms.

The relationships with these tech giants indicate a shift towards a multi-cloud strategy that could enhance Oracle's standing in the database market. Analysts suggest that AI-related cloud deals could gear Oracle towards achieving rapid revenue growth.

Oracle's ongoing partnerships position it well in providing an all-encompassing stack for enterprise AI strategies. So far, Oracle has secured significant AI agreements with companies like OpenAI and Musk's X.ai.

Additionally, the healthcare division, Oracle Health, which arose from the acquisition of Cerner, offers potential growth avenues. While it lost market share in 2023, there are prospects for revitalization, particularly amid government initiatives to modernize healthcare systems.

According to Ellison, Oracle is working diligently to update Cerner's entire code base using AI technology to enhance performance and reliability.

In conclusion, it’s evident that Ellison is steering Oracle towards a promising future, and his personal ambitions are directly tied to the company’s performance. Analysts and industry peers recognize his commitment to building one of the most significant enterprises while achieving remarkable wealth along the way.

Ellison, Oracle, Stock