Larry Ellison dropped among the ranks of the world’s richest people on Thursday, falling to No. 3 as Oracle’s stock paced its worst single-day rout in nearly a year after the cloud services firm reported quarterly revenues that fell below Wall Street’s expectations.
Key Facts
- Shares of Oracle decreased by 13.1% to around $193.80 as of around 10:45 a.m. EST Wednesday, pacing the stock’s largest intraday loss since shares fell 13.7% in January.
- A rout in Oracle’s shares comes after the company reported $16 billion in revenue in its latest quarter, below analyst estimates of $16.1 billion, according to FactSet, with the company reporting $5.8 billion in software sales, down from projections of just over $6 billion.
- Despite missing on software revenue, Oracle’s second-quarter cloud sales rose 34% to $7.97 billion, beating estimates of $7.92 billion.
- The company also reported $12 billion in capital spending in the quarter, well above the $8.3 billion expected by Wall Street.
Forbes Valuation
Ellison, Oracle’s chairman who stepped down as CEO in 2014, is the third-richest person in the world after $35.8 billion was cut from his net worth, estimated at $245.2 billion, after earlier falling to as low as fifth. Ellison previously held the No. 2 spot, now occupied by Google cofounder Larry Page ($260 billion), and ranks ahead of No. 4 Jeff Bezos ($242.9 billion), No. 5 Sergey Brin ($238.2 billion) and No. 6. 5Mark Zuckerberg ($224.6 billion). Ellison came within striking distance of Elon Musk, the world’s richest person with a $491.3 billion net worth, in September, as more than $110 billion was added to Ellison’s fortune during a surge in Oracle’s stock. Ellison became the second person ever to eclipse the $400 billion threshold with his net worth reaching nearly $405 billion, though he trailed Musk by roughly $31 billion at the time.
Big Number
$80.4 billion. That’s how much Oracle’s market value decreased by Thursday, dropping from $635.5 billion as of Wednesday’s share price to $555.1 billion. Oracle’s shares have decreased 44% since hitting an all-time high of $345.72 in September, when the company’s market capitalization reached $985.3 billion.
Key Background
Oracle’s shares have stumbled in recent weeks as more investors appeared to be trading against the company as part of a broader bet against AI. Ellison’s firm reported lofty goals for cloud infrastructure revenue in September, which CEO Safra Catz said would reach $18 billion this fiscal year and nearly double to $32 billion in fiscal year 2027, and then $73 billion, $114 billion and $144 billion over the next three years. Those estimates surprised economists: Deutsche Bank analyst Brad Zelnick said the estimates were evidence of a “seismic shift happening in computing.” Since then, investors and brokerages have expressed concerns that AI stocks may be overinflated, as roughly 45% of traders view an AI bubble as a top risk, according to a survey released by Bank of America last month.
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This story was originally published on forbes.com and all figures are in USD.
