Oracle was down slightly as 2024 drew to a close, but count the year as its best this century. Oracle is on pace to close 2024 up by roughly 60%, the tech stalwart's best performance since it rocketed nearly 300% in 1999.
Shares of the database software company, founded in 1977, have soared as Oracle's cloud infrastructure business is attracting AI startups that need cloud computing power to train their algorithms. AI demand is among factors that helped Oracle give an upbeat long-term sales outlook this fall. You can read more about what's behind Oracle's big year here.
Oracle's gains have boosted the fortunes of its founder Larry Ellison. Ellison's net worth has climbed to just under $210 billion, according to Forbes estimates, trailing only Tesla Chief Executive Elon Musk and Amazon founder Jeff Bezos for the title of richest man in the world. The 80-year-old Ellison stepped down as chief executive a decade ago but remains Oracle's chairman.
On the stock market today, Oracle stock shed a fraction to 166.13. ORCL shares have slumped in recent weeks from a high of 198.31 that the stock reached on Dec. 9. Oracle's earnings report that same day missed expectations for earnings and sales. The stock fell 7% and has mostly traded lower since then.
AI Debate Spills Over Into 2025
The late slump previews the scrutiny Oracle stock will be under from investors next year as its seeks to build on its big 2024. Oracle's November-quarter results didn't miss estimates by much, but analysts noted that the company faced elevated investor expectations heading into the report.
That will certainly continue into 2025. Oracle will need to continue the strong growth of its cloud infrastructure business to prove it can benefit from AI in a cloud market still dominated by Amazon, Microsoft and Google.
On Dec. 20, Oracle stock was downgraded to a sell call from neutral by Brian White, an analyst at Monness Crespi Hardt.
"Oracle represents a high-quality company with the opportunity to participate in a cloud transformation and benefit from the generative AI trend," White wrote. "However, valuation is stretched, competition fierce, software in transition, and the macro environment fragile."
On the other hand, Oracle stock was named a top 2025 software pick by analysts at Evercore ISI earlier this month. Evercore's Kirk Materne wrote that he expects that Oracle's cloud infrastructure business can maintain a sales growth rate of more than 50%, helped by AI.
"We believe the risk/reward continues to look attractive as we head into 2025, especially after the recent post-earnings pullback," Evercore ISI's Kirk Materne wrote.
Oracle Stock's Relative Strength
Meanwhile, Oracle stock has an IBD Composite Rating of 89 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks typically have a Composite Rating of 90 or better.
Oracle's IBD Relative Strength Rating is 86 out of 99, down from a score of 92 four weeks ago. The RS Rating means that Oracle has outperformed 86% of all stocks by price gains over the past year.
