Oracle nears $1 trillion valuation

12/09/2025 03:25 AST

Oracle's shares rose on Thursday, adding to a record run in the previous session and lifting stocks across the tech sector, as the company inches closer to the trillion-dollar club on soaring gains from its AI cloud business. The enterprise software maker's remarkable rise, fueled by a wave of multi-billion-dollar cloud deals, puts the spotlight on the scramble for computing power from companies that are pouring billions to become leaders in the AI race.

The stock's gains also put Oracle co-founder Larry Ellison on course to surpass Elon Musk, who is the world's richest man. "Oracle lit a fire under the rekindled AI trade," said Richard Hunter, head of markets at Interactive Investor, adding that the company's multi-billion-dollar demand outlook has triggered a "ripple effect" for AI-related stocks.

The Wall Street Journal also reported on Wednesday that OpenAI has signed a $300 billion deal with Oracle for computing power, among the biggest in history, likely accounting for the bulk of the new revenue Oracle outlined on Tuesday. Oracle's shares were last up 1.5 percent in premarket trading after climbing as much as 35.9 percent on Wednesday, lifting the company's market valuation to a record $933 billion, as of last close.

The stock has nearly doubled in value this year, making it among the top performers in the S&P 500 index, trouncing gains made by the so-called Magnificent Seven stocks. Co-founder Ellison saw his net worth soar by nearly $100 billion to $392.6 billion, largely driven by his 41 percent stake in Oracle, compared with Tesla CEO Musk's $439.9 billion fortune that still tops Forbes' global wealth rankings. Oracle's shares were trading at a premium compared to its cloud services peers. Their 12-month forward price-to-earnings multiple was 45.3, compared to Amazon's 31.3 and Microsoft's 31.

Ellison, 81, amassed about $95 billion in additional wealth Wednesday as Oracle shares skyrocketed after the nearly 50-year-old company forecast massive revenue growth thanks to large contracts that will dwarf current revenue. That rise lifted Ellison's overall fortune to nearly $390 billion compared with Musk's roughly $436 billion, according to Forbes' real-time billionaires index. A Bloomberg wealth index placed Ellison's bounty slightly ahead of Musk's, designating the Oracle chief number one at the moment. The difference in the tallies relates to how some of their huge holdings are estimated.

Ellison and Musk are close friends, with the Oracle boss often coming to Musk's aid during challenging periods in the Tesla tycoon's career. He invested over $1 billion in Musk's buyout of Twitter and served on Tesla's board for many years. Musk's most easily estimated holding is Tesla, whose shares have fallen in 2025 amid languishing sales attributed partly to Musk's embrace of far-right political causes.

Tesla earlier this month unveiled a compensation proposal for Musk that could top $1 trillion through 2035 if the company hits ambitious targets. Shareholders will vote on the plan in November. Ellison, a longtime supporter of President Donald Trump, holds more than 1.1 billion shares of Oracle, accounting for more than 40 percent of the company's equity, according to S&P Capital IQ.

Oracle CEO Safra Catz called the just-finished quarter "astonishing" as the company signed "four multi-billion-dollar contracts with three different customers". Oracle projected that its cloud business revenues would grow 77 percent in the current fiscal year to $18 billion. In subsequent years, revenues are expected to rise to $32 billion, $73 billion, $114 billion, and $144 billion.

AI Growth
The bulk of Oracle's new contracts comes from an agreement for OpenAI to purchase some $300 billion in computing power over roughly five years, according to a Wall Street Journal report Wednesday citing people familiar with the matter. The publication described Oracle's contract with OpenAI as a "risky gamble" for both companies that will likely require Oracle to take on additional debt to finance the AI chips. The contract will also tie Oracle's future to the fate of a single company, the Journal said.

On a conference call Tuesday, Ellison described the company as well-positioned to be a dominant force in "AI inferencing", where the technology will lead to a more profound level of automation affecting everything from assessing medical lab results to placing bets in financial markets. "AI is going to automatically write the computer programs that will then automate your sales processes and your legal processes and everything else in your factories and so on," said Ellison, who emphasized the appeal of adopting the new AI capabilities to Oracle's legacy business around secure management of proprietary company data.

Ellison built his fortune through Oracle, which he founded in 1977 as a data server provider for the CIA, among others. Early on, the company competed with Microsoft, IBM, and Sun Microsystems to provide the data infrastructure for the emerging digital economy. Ellison, who publicly sparred in earlier years with Bill Gates and other technology leaders, has also been known for heavy investments in professional sailing, with his Oracle team winning the America's Cup in both 2010 and 2013.

In 2009, Ellison became the owner of both the Indian Wells Tennis Garden and BNP Paribas Open, near Palm Springs, California, which is sometimes referred to as tennis' unofficial "fifth Grand Slam." Oracle shares finished up 36 percent at $328.33, translating into a market value of around $922 billion.