Larry Ellison slipped down the ranks of the world’s richest people on Thursday, falling to No. 3 as Oracle shares suffered their worst single day decline in nearly a year after the cloud software giant reported quarterly revenue that missed Wall Street expectations.
Key facts
Oracle shares fell 13.1% to about $193.80 as of 10:45 a.m. EST Wednesday, marking the stock’s steepest intraday drop since a 13.7% slide in January.
The selloff followed Oracle’s earnings report showing $16 billion in quarterly revenue, below analysts’ expectations of $16.1 billion, according to FactSet. Software revenue totaled $5.8 billion, missing projections of just over $6 billion.
Despite the shortfall in software sales, Oracle reported strong cloud performance, with second quarter cloud revenue rising 34% year over year to $7.97 billion, slightly above estimates of $7.92 billion.
The company also disclosed $12 billion in capital spending during the quarter, far exceeding Wall Street’s expectation of $8.3 billion.
Forbes valuation
Ellison, Oracle’s chairman who stepped down as CEO in 2014, now ranks as the third richest person in the world after an estimated $35.8 billion was wiped from his fortune, leaving him with a net worth of about $245.2 billion. He had earlier fallen as low as fifth place before rebounding.
Ellison previously held the No. 2 spot, now occupied by Google cofounder Larry Page with an estimated net worth of $260 billion. Ellison ranks ahead of Jeff Bezos at $242.9 billion, Sergey Brin at $238.2 billion and Mark Zuckerberg at $224.6 billion. In September, Ellison came close to overtaking Elon Musk, the world’s richest person with a net worth of $491.3 billion, after Oracle’s stock surge added more than $110 billion to Ellison’s fortune. At its peak, his net worth reached nearly $405 billion, briefly making him the second person ever to surpass the $400 billion mark.
Big number
$80.4 billion. That is how much Oracle’s market value shrank Thursday, falling from $635.5 billion based on Wednesday’s closing price to $555.1 billion. Oracle shares are now down 44% from their all time high of $345.72 reached in September, when the company’s market capitalization peaked at $985.3 billion.
Key background
Oracle shares have struggled in recent weeks as investors increasingly trade against the stock amid broader skepticism surrounding artificial intelligence. In September, Ellison’s firm outlined ambitious cloud infrastructure revenue targets. CEO Safra Catz said Oracle expects cloud revenue to reach $18 billion this fiscal year, nearly double to $32 billion in fiscal 2027, and then climb to $73 billion, $114 billion and $144 billion over the following three years.
Those projections surprised many analysts at the time. A Deutsche Bank analyst described them as evidence of a seismic shift in computing. Since then, however, investor sentiment has shifted, with concerns mounting that AI related stocks may be overvalued. A Bank of America survey released last month found that roughly 45% of traders now view an AI bubble as one of the market’s biggest risks.
