According to the latest ranking of Forbes' rich list, due to Oracle's stock price soaring over 60% this year, its co-founder, Director, Chief Technology Officer, and largest Shareholder Larry Ellison has become the third richest person in the world, with a net worth increase of approximately 75 billion dollars.

Ellison's net worth currently exceeds 217 billion dollars, ranking just behind his 'close friend,' Tesla CEO Musk, and Amazon founder Bezos, on the global wealthy list. Meta's Zuckerberg follows closely, with a net worth also exceeding 200 billion dollars.

Analysts pointed out that this is mainly due to the software giant Oracle, founded in 1979, entering the flourishing AI Infrastructure boom, with this year's stock price increase on track to be the best performance since the 1999 Internet bubble.

From September to November this year, Ellison often competed with Amazon's Bezos for the second position on the global rich list, while before 2000, Ellison was not always at the top of the rich list.

On Thursday's closing, Oracle rose 0.5% to a two-week high, up 63% for the year, significantly outperforming the S&P 500's year-to-date increase of 27%.

Ellison: Oracle's Cloud Computing is training the most important AI models in the world, faster and cheaper than other cloud platforms.

On one hand, Oracle is leveraging its Cloud Computing infrastructure technology to engage in the AI boom, making its database more accessible across various cloud platforms. At the same time, the company is actively expanding cloud collaborations with several top AI model development giants globally.

Two weeks ago, Oracle signed an AI training agreement with Meta, which will use Oracle Cloud to enhance the training and deployment of various AI projects, including the Llama large language model. In June, OpenAI also stated that it would utilize Oracle's cloud infrastructure.

Last year, Ellison visited Microsoft headquarters for the first time and announced a partnership, allowing users to access Oracle's database via the Microsoft Azure cloud platform. This year, Oracle has reached similar agreements with Google and Amazon, and has also engaged in high-value AI trades with Musk's X.ai.

Ellison has stated:

"Oracle's Cloud Computing infrastructure has trained some of the world's most important generative AI models because we are faster and cheaper than other cloud platforms. The AI models and AI agents trained by Oracle will accelerate global scientific discovery, economic development, and business growth, with the scale of opportunities being unimaginable."

The CEO of AI video generation startup Genmo, Paras Jain, praised Oracle's cloud hardware for its reliability, exceptional performance, and ease of startup, specifically mentioning that "Oracle's pricing is more competitive than other hyperscale cloud providers." He noted that Oracle's products differ from those using GPU computing elsewhere, as the 'bare metal' computers provided by the company sometimes deliver better performance than architectures employing server virtualization.

Oracle executives predict that revenue will double within five years and exceed $100 billion, solidifying its leading position in database software.

Oracle executives are very confident about revenue growth in the coming years, expecting revenue to increase by about 10% year-on-year in the fiscal year ending May 2025, which would make it the second-fastest annual growth record since 2011.

In September this year, Oracle's Executive Vice President Doug Kehring stated that the company will generate over 66 billion USD in revenue in fiscal year 2026 and exceed 104 billion USD in fiscal year 2029.

This indicates that growth will accelerate significantly, resulting in a compound annual growth rate exceeding 16%, nearly doubling the current compound annual growth rate of 9%. Ellison also mentioned that the revenue target of over 100 billion USD is "easily achievable," with the revenue for fiscal year 2024 at 53 billion USD, meaning the company expects revenue to nearly double in five years.

Mizuho Analyst Siti Panigrahi, who rated the stock as "Buy", believes that the multi-cloud strategy should enhance Oracle's market share in databases, and cloud Trades related to AI will also help the company deliver on its promise of faster revenue growth:

"Oracle now has an end-to-end stack that can help enterprises build their AI strategies. Of the remaining 97 billion USD in Oracle's performance obligations or unrecognized revenue, 40% to 50% is related to renting GPUs. As more businesses begin to adopt AI in the future, this will be a Bullish trend for Oracle, which has hundreds of thousands of large customers."

Currently, Oracle's leading position in the database software Industry remains solid, with industry research company Gartner estimating its market share in database management systems at 17% in 2023. However, Oracle still lags far behind its biggest competitor in Cloud Computing infrastructure, with Amazon controlling 39% of the market in 2023, followed by Microsoft (23%) and Google (8.2%), while Oracle accounts for only 1.4%.

Optimistic Analysts are bullish on Ellison's good relationship with Musk benefiting the company's Business, while pessimists claim capital expenditure is unsustainable.

In addition, Oracle Health, established after the company spent 28.2 billion USD to acquire electronic health records software supplier Cerner in 2022, is also viewed positively, even being referred to by Ellison as "another major pillar of growth that has not yet fully formed."

Evercore Analysts recently expressed optimism in a Research Report, anticipating that the friendly relationship between Ellison and Musk may benefit Oracle Health, as Musk could push for the modernization of the existing healthcare system in the USA after overseeing the Trump administration's efficiency office.

Two weeks ago, Oracle published its Q2 earnings report and guidance for the fiscal year 2025 ending in November, both of which fell short of expectations, causing the stock price to hit its largest decline of the year. However, CEO Safra Catz praised the 'record-breaking growth in Cloud Infrastructure,' stating that AI demand drove Oracle's Cloud Infrastructure revenue up by 52%, which 'far exceeds any other major cloud infrastructure competitor.'

However, the cost of this is that Oracle expects its capital expenditures for fiscal year 2025 to double compared to fiscal year 2024, potentially approaching $13.8 billion. In the second quarter of fiscal year 2025, its capital expenditure was $4 billion, exceeding analyst expectations of $3.5 billion, which also led to the company experiencing negative free cash flow.

Analyst Brian White from Monness, Crespi, Hardt has downgraded Oracle's rating from neutral to 'Sell,' with a target price of $130, indicating more than a 20% downside, primarily because in the fiercely competitive Cloud Computing sector, Oracle's ongoing plan to invest heavily in capital expenditures 'is unsustainable.'

'Oracle's current PE is about twice its long-term historical average, and the latest quarterly earnings report was unexpectedly bland.'

'In our view, the level of competition in the public cloud sector is daunting, dominated by three innovative and well-funded large Technology companies: Amazon AWS, Microsoft Azure, and Google Cloud.'

Despite Oracle's early success in attracting customers pursuing AI wealth, its overly high valuation, intense industry competition, and weak macro environment make the company's plan to double capital expenditures in fiscal year 2025 alarming and unsustainable.