Oracle shares surge 43%, co-founder Ellison tops Musk as world's richest

Synopsis

Oracle shares saw a significant surge. This happened after a strong forecast for its cloud sector. Larry Ellison's wealth increased substantially. He briefly surpassed Elon Musk as the world's richest person. OpenAI plans a large purchase of Oracle's computing power. Oracle is becoming a major player in AI cloud computing. It competes with Microsoft and Google.

New York: Oracle shares gained the most since 1992 after the company gave an aggressive outlook for its cloud business, cementing the software maker's place in the race to support demand for artificial intelligence computing.

The stock surged as much as 43% Wednesday mid-morning in New York, bringing its market valuation to $969 billion and making co-founder Larry Ellison the world's richest person, surpassing Elon Musk.

Ellison, 81, amassed more than $100 billion in additional wealth Wednesday as Oracle shares skyrocketed.

That rise lifted Ellison's overall wealth to about $406 billion compared with Musk's roughly $440 billion, according to a Forbes real-time billionaire's index.

A Bloomberg wealth index placed Ellison's bounty slightly ahead of Musk's, designating the Oracle chief number one at the moment. The difference in the tallies relates to how some of their huge holdings are estimated.

AI-related stocks such as chip developer Nvidia and Asian suppliers also climbed.

OpenAI has signed a contract to purchase $300 billion in computing power over five years from Oracle, among biggest in history, the Wall Street Journal reported Wednesday.

Known for its database software, Oracle has recently found success in the red-hot cloud computing market and is emerging as a key provider of AI computing capacity, competing against cloud leaders Amazon.com, Microsoft and Alphabet's Google. It also counts Nvidia and ByteDance's TikTok as major cloud customers.

Such deals helped boost remaining performance obligations to $455 billion at the end of the fiscal first quarter, Oracle said. That’s more than four times higher than same period a year earlier.

It’s roughly four times Google’s backlog, suggesting Oracle’s cloud-growth rate is poised to surpass Google’s. “It was an astonishing quarter,” and demand for Oracle cloud infra continues to build, chief executive Safra Catz said.

The company signed four multibillion-dollar contracts with three different customers in the quarter and expects to sign up several additional customers, she added, pushing remaining performance obligations above $500 billion.

Recent and upcoming bookings will translate to a rapidly expanding cloud infrastructure business over the coming years, Catz said. That unit will expand 77% to $18 billion this fiscal year and continue to grow at an aggressive clip, reaching $144 billion in annual revenue by the fiscal year ending in May 2030, she said.

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