Retail Investors Limit Value-Focused Hedge Funds’ Ability to Acquire Oracle Shares as Stock Surge Drives Larry Ellison Closer to Elon Musk’s Net Worth

Retail Investors Limit Value-Focused Hedge Funds’ Ability to Acquire Oracle Shares as Stock Surge Drives Larry Ellison Closer to Elon Musk’s Net Worth

This article is for informational purposes only and does not constitute investment advice. The author does not hold shares in any of the companies mentioned.

Oracle’s Meteoric Rise: A Contender for the Top

In a landscape dominated by growth and artificial intelligence (AI) capital expenditures, Oracle has ascended to a prominent position, highlighted by striking stock gains in recent trading sessions. This surge has positioned co-founder and CTO Larry Ellison as a formidable rival to Elon Musk for the title of the world’s wealthiest individual.

Oracle’s Transformation into an AI Giant

Historically recognized for its database software and enterprise solutions, Oracle has successfully pivoted to establish itself as a leading player in cloud computing. With a robust portfolio of AI data center agreements, the company stands at the forefront of infrastructure development tailored for AI applications.

Q2 2025 Earnings Report: A Mixed Bag

Oracle released its second-quarter earnings for fiscal year 2025 on Tuesday, reporting revenue of $14.93 billion, which fell slightly short of the anticipated $15.02 billion. The earnings per share (EPS) also missed estimates by one cent, raising concerns about the performance of its cloud division, which showed signs of weakness.

Backlog Growth: A Silver Lining

Despite the earnings miss, the substantial increase in Oracle’s revenue backlog—nearly quadrupled from the previous quarter—stood out as a crucial takeaway. This impressive growth was largely attributable to four significant contracts secured with prominent clients, including OpenAI, NVIDIA, and Meta.

Remarkable Projections for Cloud Revenue

Oracle’s forecasts for its cloud services are ambitious. The company anticipates Oracle Cloud Infrastructure revenue to surge from approximately $10 billion now to around $18 billion this fiscal year—a remarkable growth rate of 77%.Projections extend into the next four years, estimating revenues could reach $32 billion, $73 billion, $114 billion, and ultimately $144 billion, respectively. Notably, much of this anticipated revenue is already included in Oracle’s reported Remaining Performance Obligations (RPO).

“We expect Oracle Cloud Infrastructure revenue [of ~$10BN] to grow 77% to $18 billion this fiscal year—and then increase to $32 billion [double], $73 billion [double], $114 billion [almost double], and $144 billion over the subsequent four years. Most of the revenue in this 5-year forecast is already booked in our reported RPO. Oracle is off to a brilliant start to FY26.”

Implications of Major AI Partnerships

Oracle’s role in the expansive $500 billion Stargate AI initiative further solidifies its position in the market. A landmark 4.5GW data center deal with OpenAI, which will entail substantial payments starting in three years, is a prime example of this collaboration. According to OpenAI’s Sam Altman, such a data center capacity demands an investment of around $100 billion.

Moreover, OpenAI bolstered its agreement with Oracle in July, committing to another 4.5GW of data center capacity. While the exact location for this expansion remains unspecified, Oracle, in partnership with Crusoe, is currently spearheading the development of the Stargate I data center in Abilene.

Market Reaction and Valuation Concerns

Oracle’s stock has surged over 31% in pre-market trading, currently hovering around the $76 mark. This price surge has raised concerns about the company’s valuation, now appearing unsustainably high for value-focused investors.

The momentum surrounding Oracle shares bears an uncanny resemblance to meme stock volatility, although it is driven by strong financial performance rather than speculative trends, as seen with companies like GameStop and AMC Entertainment.

Larry Ellison: The Wealth Battle

As a result of the stock’s impressive performance, Larry Ellison’s net worth has skyrocketed by approximately $70 billion, bringing it to around $364 billion—just shy of Elon Musk’s $384 billion, according to Bloomberg’s Billionaires Index. This scenario underscores the dynamic nature of tech leadership where a CTO could rival the wealth of a CEO. However, Ellison’s financial ascent may be short-lived in light of Musk’s impending $1 trillion pay package.

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