Oracle co-founder, chairman and chief technology officer Larry Ellison spoke at the Oracle OpenWorld conference in San Francisco on October 1, 2017.
David Paul Morris | Bloomberg | Getty Images
Larry Ellison turned 80 last month, and it was a year of celebration.
Other players in the legacy tech industry Intel and Cisco Oracle has emerged as a Wall Street darling as it struggles to gain a foothold in a world increasingly fuelled by artificial intelligence.
The company’s shares surged 11% on Tuesday after the company reported better-than-expected earnings after Monday’s close. They rose further on Wednesday to close at a record high of $157.10. Oracle has reported double-digit gains in each of its three quarters this year, driven by its cloud business. It didn’t see any double-digit gains last year and has only seen one in 2022.
“Excitement is back,” Guggenheim analysts wrote in the title of their post-earnings report, emphasizing “increasing momentum across all businesses.”
Oracle shares have risen 49% this year, the second-highest gain after the AI chip maker. NVIDIA — up 136% — among large tech stocks. Metarose 45%.
Meanwhile, Intel’s shares have fallen 60% and Cisco’s shares have fallen nearly 3% after both companies announced major job cuts in their earnings reports last month.
The biggest financial winner from Oracle’s rise has been Mr. Ellison, who founded the software company in 1977 and remains chairman. He owns more than 40% of the company’s outstanding shares, and his net worth has ballooned to $192 billion, according to Forbes magazine. Tesla CEO Elon Musk ($251 billion) and Amazon founder Jeff Bezos ($202 billion) are richer.
By the standards of fast-growing technology, Oracle remains fairly stagnant.
Revenue rose 8% year over year to $13.31 billion in the most recent quarter, and CEO Safra Catz said on the earnings conference call that he expects growth of 8% to 10% in the current quarter.
The New York Stock Exchange will welcome Oracle (NYSE: ORCL) to the podium on July 12, 2023. To mark the occasion, CEO Safra Catz and NYSE President Lynn Martin will ring the opening bell.
New York Stock Exchange
Since 2011, Oracle has only had one year of double-digit revenue growth (18% in fiscal 2023) and has contracted four times.
“After 13 years of single-digit organic total revenue growth, Oracle is accelerating to double digits again,” JMP analysts wrote in a note on Tuesday, upgrading their rating to “buy” from “hold.” “We are very confident in the EPS and believe full-year total revenue growth will be in the double digits.”
Oracle is currently in the middle of its CloudWorld conference in Las Vegas, which wraps up on Thursday. Between the earnings report and the annual event, investors are praising the company’s cloud story, which includes both its infrastructure business and its database.
Oracle still lags far behind Amazon Web Services, Microsoft and Google In terms of cloud infrastructure market share, this business has been a big growth driver for the company, with revenue from the division surging 45% year-over-year to $2.2 billion in the quarter.
Oracle not only competes with the top cloud companies, but also increasingly partners with them.
A year ago, Ellison visited Microsoft’s headquarters outside Seattle for the first time to announce a partnership with a company that had been a rival for more than 30 years.
Oracle said Monday that its database software will be available to AWS customers on Oracle hardware in Amazon’s data centers, the latest in a series of deals Oracle has made over the past year with three major cloud infrastructure vendors.
“We believe our cloud partnerships with AWS, Microsoft and Google will accelerate the growth of our database business for years to come,” Ellison said during the earnings call on Monday.
Oracle did not immediately comment on the matter.
“No more passwords”
Mr. Ellison has long described Oracle’s database as “autonomous,” piggybacking on the hype around self-driving cars (he once served on Tesla’s board and is close to Mr. Musk) and the rise of AI. The company’s products don’t require manual patching and have no downtime, something Mr. Ellison said other cloud providers can’t do. But these days, being nice has paid off.
Ellison, who has criticized AWS at events for years, decided to allow customers to take advantage of Amazon’s market-leading cloud and Oracle’s full-featured database.
“Of course, customers have been able to use Oracle within AWS for a long time,” AWS CEO Matt Gurman said in a recent CNBC interview, but the new service will make it easier for customers to sign up for the AWS marketplace for third-party software, back it up, and move that data into AWS analytics tools, Gurman said.
Gurman, who succeeded Adam Selipsky as AWS CEO in June, added that customers had been asking him to explore ways the two companies could work more closely together.
Furthering his research into AI, now in his 81st year, Ellison is now tackling passwords, which he says are “just ridiculous” because they are insecure and can be “easily hacked.”
“Here’s how logon will work,” Ellison said on an earnings conference call. “I type in Larry.Ellison@oracle.com, the computer looks at me and says, ‘OK, hi, Larry,’ and that’s it.”
He further noted that since Cats can recognize him just as well as his children, his computer should be able to do the same.
“No more passwords,” he said. “Passwords have to go.”
WATCH: Oracle emerges as the fourth cloud player
