“AI will change everything,” says Oracle’s Larry Ellison. It has certainly changed Oracle.
Shares surged 36 per cent after reporting earnings. It was Oracle’s biggest one-day gain since 1992, larger than anything seen during the dotcom bubble.
For a company of its size – Oracle’s valuation rose above $920 billion (€785 billion) – it represented an unprecedented repricing.
The spark was not present-day earnings, which actually missed forecasts, but a blowout pipeline of future business. Bookings tripled in a single quarter to $455 billion as customers clamoured for Oracle to build data centres to train AI models.
No one anticipated such numbers. “I’m sort of blown away,” Guggenheim’s John DiFucci said.
“Truly awesome,” Deutsche Bank said.
“Momentous,” TD Cowen said.
“The biggest large-cap growth acceleration story in all of tech”, UBS said.
Even after the jump, Bank of America predicted another 50 per cent upside.
Ellison’s personal fortune rose by more than $88 billion overnight, the biggest one-day wealth gain in history, briefly making him the world’s richest man.
However, this is not dotcom-style delirium. Then, Oracle traded on more than 100 times estimated earnings, compared with 48 today. That’s still high, but Oracle looks “inexpensive” when adjusted for growth, says UBS.
Nearly three years after ChatGPT triggered an AI frenzy – one that propelled Nvidia on a dizzying 1,000 per cent run to become the world’s most valuable company – analysts are still struggling to keep pace.
The AI trade is often said to have gone too far; to bulls, Oracle’s surge suggests it has not gone far enough.
