Oracle stock spikes 16%: Is the tech OG having a resurgence?


Oracle co-founder Larry Ellison’s fortune increased by just over $15bn (£11.31bn) in one day, making him the fifth richest person in the world.

On the back of better-than-expected fiscal Q2 results, Oracle saw its stocks surge by nearly 16% on Friday December 10, 2021. After decades of single-digit growth, the tech giant’s performance proved to be a very welcome payday for Ellison – the company’s biggest shareholder.

While many have had their eye on FAANG stocks, Oracle’s performance last week has moved Ellison ahead of Google co-founders Larry Page and Sergey Brin in terms of personal wealth. So is Oracle having a resurgence?

What caused Oracle’s stock price surge?

The tech stalwart has been focused on making up the gap in cloud computing market shares. This has previously separated it from Amazon, Alphabet Inc’s Google and Microsoft. And it appears that its successes in Oracle Cloud Infrastructure is proving to be a winner with Wall Street.

The company reported $1.21 per share in adjusted earnings and brought in $10.36bn for the quarter in revenue. Both of these beat analyst estimates. The spike in share price added nearly $38bn to its market capitalisation.

It could be seen as a flash in the pan. But Oracle has been steadily recording some impressive gains over the past year. Its share price has climbed 39% since December 31, 2020. For a 5-year view of the performance of this share, see the graph in our dedicated guide.

Is it one to watch?

The average investor is not likely to become the fifth richest person in the world just from taking an interest in Oracle’s stock market performance. But Larry Ellison’s recent boost in wealth is indicative of where the market feels Oracle is heading.

The tech giant’s enterprise resource planning (ERP) and next-generation cloud infrastructure solutions are enjoying particularly strong demand. As its focus remains solidly on further expansion of its cloud business, expectation is that this will continue to bolster its profit margins.

Oracle has also increased its share repurchase programme by $10bn, improving its capital returns to shareholders and signalling its confidence in its own improving profitability.

This article offers general information about investing and the stock market, but should not be construed as personal investment advice. It has been provided without consideration of your personal circumstances or objectives. It should not be interpreted as an inducement, invitation or recommendation relating to any of the products listed or referred to. The value of investments can fall as well as rise, and you may get back less than you invested, so your capital is at risk. Past performance is no guarantee of future results. If you're not sure which investments are right for you, please get financial advice. The author holds no positions in any share mentioned.
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