Oracle's stock rises as the OpenAI deal improves prospects

Larry Ellison, a co-founder of Oracle, briefly became the richest man in the world after his stock rose 36% in a single day

Oracle's stock jumped 36% yesterday, September 10, after the company's impressive earnings report disclosed a significant collaboration with ChatGPT creator OpenAI.

Keep tabs on all markets with TradingView Oracle's most recent share price spike is the biggest one-day increase since 1992 and has boosted the company's market capitalization from about £678 billion to over £922 billion. Oracle is sometimes overlooked when it comes to the best stocks for do-it-yourself investors, but this sharp increase places the data specialist in the neighborhood of the Magnificent Seven in terms of valuation.

Oracle's (NASDAQ:ORCL) earnings were released following the close of US markets on September 9. They showed a 6% increase in non-GAAP earnings to £1.47 per share and a 12% annual increase in revenue (in dollar terms) to £14.09 billion.

Oracle shares surged as a result of the forward-looking numbers, even though these numbers actually fell just short of analysts' expectations.

Oracle reported that customer bookings had increased by 359 percent in comparison to the prior year. This is primarily due to an agreement with OpenAI to build data center capacity to house artificial intelligence (AI) software, according to a Wall Street Journal report.

The significant increase in Oracle's bookings is a welcome intervention for proponents of AI, who have begun to doubt the sustainability of the AI megacap boom in recent weeks.

The company shocked investors last week by increasing its cash burn projections from £35 billion to £115 billion by 2029. OpenAI's CEO, Sam Altman, has stated that he believes the AI market is currently in a bubble.

However, senior equity analyst Matt Britzman of Hargreaves Lansdown stated that yesterday "belonged to big tech and the AI narrative," "reminding investors that the trade still has legs."

When optimism returned to the larger AI narrative yesterday, Nvidia's share price increased 3 points to 8%.

Brad Zelnick, a research analyst at Deutsche Bank, stated that Oracle has reaffirmed its leadership in AI infrastructure. Only a few quarterly results in our nearly two decades of covering Oracleand, by extension, the software industry as a wholematch its FY 2026 Q1 results in terms of the scope of revision and the moment's clarity.

For a short while, Oracle's Ellison surpasses Musk in wealth.

Major Oracle shareholders have instantly become wealthier as a result of the sharp increase in the company's share price, which has instantly increased its market capitalization by nearly £250 billion.

This is particularly true of Larry Ellison, the former CEO and co-founder of Oracle. Ellison reportedly owns 40% of Oracle, along with substantial stakes in Tesla, where he served on the board from 2018 to 2022, and roughly 50% of the media behemoth Paramount Skydance, according to Bloomberg.

Oracle Corp.'s executive chairman and co-founder is Larry Ellison. in February 2025 at a signing ceremony for an executive order held in the White House Oval Office in Washington.

Oracle's co-founder and executive chairman, Larry Ellison, at the White House earlier this year. When the value of Ellison's 40% stake in Oracle increased in response to the company's Q1 results, he momentarily became the richest man in the world.

Ellison's net worth increased to over £383 billion after the Oracle stock surge of yesterday, adding at least £89 billion to his wealth.

"The rally helped Oracle's Larry Ellison overtake Elon Musk as the richest man in the world, rekindling interest in AI-related names and boosting the semiconductor industry," Britzman said.

When Oracle shares were trading at their highest yesterday afternoon, Ellison's net worth seemed to have briefly surpassed Musk's. However, they have since dropped from highs of about £345 to closer to £332, keeping Ellison in second place behind Tesla's CEO.

Is it wise to purchase Oracle stock?

The sharp increase in Oracle's share price may bring the long-standing tech giant more directly in front of investors around the globe. But there's a chance that the stock is now overpriced because of this.

Before Goshawk assumed management of the ETF last year, Oracle was a part of the Goshawk Global Balanced UCITS ETF (LON:ROE).

"We have long appreciated the potential of their cloud business," the fund's portfolio manager, Alex Illingworth, stated. But even we were taken aback by the size of the new demand.

According to Illingworth, "we certainly know that Oracle will now be cash flow negative for a few years," given the uncertainty surrounding the future cash flows suggested by the size of the new deals. We appreciate Oracle meeting this demand, but we also used yesterday as an opportunity to reduce our position.

The key question is whether Oracle can report future results that support its new, higher valuation. Oracle stock is currently trading at 76 times its earnings over the last 12 months and 49 times its projected earnings over the next 12 months, so it will need to keep growing in order to meet these expectations after the share price increase.

After the outcome, Brad Sills, a research analyst at Bank of America, stated, "It's unclear at this time whether Oracle's long-term competitive moat in the AI infrastructure sector can be sustained." But over time, the company's track record as a top software platform ought to translate into the development of managed services with added value for AI workloads.

Sills went on to say, "In a one-stop shop solution, Oracle's dominant position in databases and applications could drive meaningful pull through of AI compute."

After the results, the Sills team at Bank of America raised Oracle's stock from Neutral to Buy. The target price was increased from £240 to £335 by Deutsche Bank analysts. It's important to remember that this updated price target is just 2% higher than the closing price of Oracle's shares on September 10.

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