Oracle’s sudden AI stardom is giving 1999 energy

Oracle’s future is now tightly linked to that of ChatGPT owner OpenAI. – Justin Sullivan/Getty Images

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Oracle, a large but generally sleepy cloud-computing company, just had an absolutely bonkers day on Wall Street.

The stock (ORCL) shot up more than 40% Wednesday morning, its largest single-day jump ever. It was such big leap that it minted Oracle co-founder Larry Ellison $100 billion in less than hour, making him the world’s richest person and bumping Elon Musk to second place.

The catalyst wasn’t a flashy product rollout or a surprise earnings beat — in fact, Oracle’s quarterly revenue and profit came in below Wall Street’s expectations Tuesday evening.

Instead, the fire came from Oracle’s outlook for the next few years, which, if it pans out, would cement the company as a power player in artificial intelligence. That’s a big “if,” though — especially given that the bulk of Oracle’s rosy outlook hinges on revenue from one major customer, the unprofitable OpenAI, according to the Wall Street Journal.

Oracle’s outlook is “so exuberant that if we’d gotten this sort of prediction from a less established company it might have been shrugged off as either a lie or a misplaced digit,” Steve Sosnick, chief strategist at Interactive Brokers, told me.

Here are the key things powering Oracle’s stock at a clip it hasn’t experienced since the late-90s dot-com-bubble era, when it rose nearly 600% in the span of a year before falling back to earth by 2002:

Oracle’s CEO, Safra Catz, said the company’s cloud infrastructure revenue would grow 77% to $18 billion by the end of May 2026. But that’s not all: It projects that revenue to hit $144 billion by 2030.
Catz said Oracle had signed four multi-billion-dollar contracts with three different customers, giving the company $455 billion in “outstanding contract revenue” that it…

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