Oracle Stock at Risk as Larry Ellison Files to Dump $7.5 Billion in Shares

Oracle (NYSE:ORCL) stock retreated as investors reacted to its quarterly earnings and after Larry Ellison filed to dump shares worth about $7.5 billion. It ended the week at $150, down by 11% from its highest point this week. This retreat continued on Hyperliquid, the leading perpetual futures platform.

Larry Ellison to Dump Oracle Shares Worth $7.5 Billion

Ellison, who started the company in 1977, plans to sell shares worth about $7.5 billion by the end of next month. This is notable since the stock has plunged by 56% from its highest point last year, while his net worth has dropped by over $43 billion this year to $204 billion. 

The filing came a few months after he pledged to personally backstop the $40 billion financing that David Ellison made during his hostile takeover of Warner Bros Discovery. At the same time, he has pledged 346 million shares of Oracle as collateral to secure personal loans.

The filing came after the company published strong financial results, which showed that its artificial intelligence (AI) business continued doing well. Its revenue jumped by 30% to $19.3 billion in the first quarter, with its cloud infrastructure rising by 121% to $7.4 billion. 

Also, the cloud applications revenue rose by 10% to $4.2 billion, while its remaining performance obligations (RPO) rose by $30 billion to $664 billion. There are now signs that the RPO is starting to convert, with the company delivering over 300,000 GPUs to its AI cloud customers. 

Analysts are Bullish on Oracle Stock

Most analysts who commented on the company after its earnings boosted their estimates. Karl Keirstead, a UBS analyst, hiked his target from $245 to $250, while Barclays’ Raimo Lenschow hiked from $250 to $252. KeyCorp boosted to $285, while DA Davidson’s Gil Luria hiked to $225. 

Analysts note that the company’s revenue growth is continuing and that it is starting to benefit from its large AI orderbook. Most importantly, its recent sell-off has made it relatively undervalued, with its forward price-to-earnings ratio falling to 18, lower than the S&P 500 Index’s 19.1. The technology sector has a forward PE ratio of 22.

Additionally, there are signs that its revenue growth will continue. The average estimate among analysts is that its second-quarter revenue will grow by 32% to $21.2 billion, followed by $23.3 billion in the next quarter. 

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