Oracle’s shares surge as OpenAI deal boosts outlook

(Image credit: Cheng Xin/Getty Images)

published 11 September 2025

Shares in Oracle gained 36% yesterday (10 September) following a blowout earnings report that revealed a huge partnership with ChatGPT-maker OpenAI.

Oracle’s latest share price jump is its largest in a single day since 1992, and has catapulted the company’s market capitalisation from around $678 billion to over $922 billion. While Oracle sometimes gets overlooked when it comes to DIY investors’ top stock picks, this sudden jump puts the data specialist close to the Magnificent Seven in terms of its valuation.

Oracle’s (NASDAQ:ORCL) results, announced after US markets closed on 9 September, revealed a 12% annual increase in revenue (in dollar terms) to $14.9 billion and a 6% increase in non-GAAP earnings to $1.47 per share.

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These numbers actually fell slightly short of analysts’ expectations, but the forward-looking numbers caused Oracle shares to soar.

Oracle announced a 359% year-over-year increase in customer bookings compared to the previous year. According to a report in the Wall Street Journal this is largely driven by a deal with OpenAI to develop data centre capacity to host artificial intelligence (AI) software.

For AI advocates, the huge boost in Oracle’s bookings is a timely intervention with faith in the durability of the AI megacap boom having started to wobble in recent weeks.

OpenAI’s CEO Sam Altman has expressed his view that the AI market is currently a bubble, and last week the company stunned investors by raising its cash burn projections from $35 billion to $115 billion by 2029.

But yesterday “belonged to big tech and the AI narrative”, said Matt Britzman, senior equity analyst at Hargreaves Lansdown, “reminding investors that the trade still has legs”.

Nvidia’s share price gained 3.8% yesterday, as positivity returned to the broader AI narrative.

“Oracle has underscored its position as the leader in AI infrastructure,” said Brad Zelnick, research analyst at Deutsche Bank. “In our near 20 years covering Oracle, and for that matter the entire software industry, there are few quarterly results that match [its FY 2026 Q1 results] both in terms of magnitude of revision and clarity of the moment.”

Oracle’s Ellison (briefly) overtakes Musk’s wealth

With the surge in Oracle’s share price having added almost $250 billion to its market cap in a stroke, major Oracle shareholders have immediately become wealthier.

That is especially true of Oracle’s co-founder and former CEO Larry Ellison. According to Bloomberg, Ellison owns 40% of Oracle (as well as significant holdings in Tesla, having sat on the company’s board from 2018-2022, and around 50% of the media giant Paramount Skydance).

Larry Ellison, co-founder and executive chairman of Oracle Corp., during an executive order signing ceremony in the Oval Office of the White House in Washington in February 2025 — Larry Ellison, co-founder and executive chairman of Oracle, at the White House earlier this year. Ellison briefly became the world’s richest man when his 40% holding in Oracle surged in value following the company’s Q1 results.

Yesterday’s Oracle stock bounce boosted Ellison’s wealth by at least $89 billion, pushing his net worth to over $383 billion.

“The rally catapulted Oracle’s Larry Ellison to challenge Elon Musk as the world’s richest man, reigniting enthusiasm for AI-linked names and lifting the semiconductor space,” said Britzman.

Ellison’s net wealth appears to have briefly overtaken Musk’s when Oracle shares were trading at their peak yesterday afternoon, though they have fallen back from highs of around $345 to closer to $332 since then, keeping Ellison in second place behind Tesla’s CEO for the moment.

Should you buy Oracle shares?

Having been a big tech stalwart for many years, the sudden surge in Oracle’s share price could push it more squarely into the attention of investors worldwide. With this, though, comes a risk that the stock is now overvalued.

The Goshawk Global Balanced UCITS ETF (LON:ROE) has held Oracle since before Goshawk took over the ETF's management last year.

"We have admired the opportunity for their cloud business for a while," said Alex Illingworth, portfolio manager of the fund. "However, the magnitude of the new demand even surprised us."

Given uncertainty over the future cash flows implied by the size of the new deals, Illingworth said "we certainly know that Oracle will now be cash flow negative for a few years. We welcome Oracle addressing this demand, but took the opportunity to trim our position yesterday into the strength."

Ultimately, it comes down to whether Oracle can post future performance that justifies its new, elevated valuation. Following the share price gain, Oracle stock now trades at 76 times its earnings over the past 12 months, and 49 times projected earnings over the next 12, so it will need to continue growing in order to meet these expectations.

“The sustainability of Oracle's long-term competitive moat in the AI infrastructure industry is unclear at this point,” said Brad Sills, research analyst at Bank of America, following the result. “However, the company's history as a leading software platform should translate to building value-added managed services for AI workloads over time.”

Sills also added that “Oracle's leading position in database and applications could drive meaningful pull through of AI compute in a one-stop shop solution.”

Sills’ team at Bank of America upgraded Oracle’s shares to Buy from Neutral following the results. Deutsche Bank analysts raised their target price from $240 to $335. It is worth noting that this revised price target is only 2% higher than where Oracle’s shares closed at the end of trading on 10 September.

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Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.

Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.

Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.