Oracle Stock Crash Erases $24B From Billionaire Larry Ellison’s Wealth
Oracle Corporation experienced a significant decline in stock value in mid-October 2023. The company’s shares fell approximately 6-7% on October 17 and further decreased by about 5% on October 20. These downturns resulted in a staggering loss of about $24.1 billion and $14 billion from billionaire Larry Ellison’s net worth on those respective dates.
Impact on Larry Ellison’s Wealth
Ellison, who has seen a remarkable increase in wealth over the past year, briefly reached a net worth of $392.6 billion in early September 2023. By late October, his fortune is estimated to be between $336 billion and $351 billion, making him the world’s second-richest individual, behind Elon Musk.
Current Stock Performance
As of October 23, 2023, Oracle stock closed near $280, maintaining a 70-75% year-to-date increase despite its recent dips. Analysts predict an average 12-month price target of approximately $320, representing a potential upside of about 15%. However, forecasts can vary widely, ranging from the low $175s to as high as $400.
Factors Influencing Stock Prices
- Massive AI cloud backlog, estimated at $455-500 billion in remaining obligations.
- Ambitious revenue goal of $166 billion for 2030.
- Technological support levels identified around the $270 mark.
Market analysts remain optimistic about Oracle’s growth potential in AI technology. Jefferies, UBS, and Bank of America project stock prices could reach between $360 and $400, driven by ongoing AI developments. However, concerns persist regarding high valuation multiples, with forecasts reliant on effective execution of AI rollouts.
Profit Taking and Market Sentiment
The recent stock slide suggests a market shift from euphoria to caution. Profit-taking has been prevalent following Oracle’s announcements of significant AI contracts. Despite these fluctuations, analysts insist that the optimistic guidance from Oracle’s management signals it’s not the end of the company’s growth story.
Analyst Opinions and Forecasts
Wall Street demonstrates a divided outlook. The average target remains in the low $300s, implying a modest upside from current values. While many analysts express bullish sentiments, some suggest watching for risks associated with financing major expansions. The stock currently trades at around 11 times its sales, considerably lower than competitors like Amazon and Microsoft.
Long-Term Prospects for Oracle
Looking into the future, Larry Ellison’s investments in Oracle are pivotal to his wealth, which largely derives from his substantial stake in the company. With a strategic focus on AI and cloud computing, Oracle aims to sustain investor confidence and uphold its position among leading tech firms.
For now, the key question remains: Can Oracle successfully deliver on its ambitious AI-related promises? A robust increase in performance could validate the company’s high valuation and reinforce Ellison’s standing among the world’s wealthiest individuals.
