Oracle (ORCL.US) has experienced a rollercoaster year in 2025. The stock opened at $166.64 and closed at $197.49 on Christmas Eve, swinging between a low of $118.86 and a high of $345.12—marking a 191% annual range. A recent five-day rally added 11% to its year-end momentum.
The volatility stems from Oracle's dual focus: accelerating its cloud subscription transition while venturing into social media and Hollywood. The company's shift to predictable cloud revenue streams has reduced client IT costs, but massive capital expenditures now consume most incremental income.
Between 2011 and 2020, Oracle averaged under 1% annual revenue growth but maintained 75% gross margins and 34% free cash flow, generating $118 billion in cumulative FCF while cutting diluted shares by 41%. Recent quarters show faster growth (14% revenue increase) at a cost: margins fell to 64%, with $10 billion quarterly cash burn. Debt rose as cash reserves dwindled, prompting an $18 billion bond issuance in September.
A key catalyst was Oracle's $300 billion cloud contract with OpenAI, initially boosting shares before investor concerns about counterparty risks and execution costs triggered a prolonged correction.
Simultaneously, founder Larry Ellison is expanding into media. Oracle already hosts U.S. TikTok data and will own 15% of a new TikTok U.S. entity under a January 2026 deal, retraining its algorithm exclusively on American data. Meanwhile, Ellison’s family is building a film empire through Paramount Skydance (PSKY.US), producer of Mission: Impossible sequels. Their failed bid for Warner Bros Discovery (WBD.US) highlighted risks—Ellison’s trust could liquidate Oracle shares to fund media acquisitions, potentially swapping profitable tech stock (26x P/E) for loss-making legacy assets.
Warner Bros Discovery’s mixed portfolio (HBO, DC Comics, declining cable networks like CNN) contrasts with Paramount Skydance’s aging CBS News audience. Yet TikTok’s youth reach (63% U.S. adoption under age 30) presents algorithmic influence opportunities if Oracle controls its recommendations.
While Oracle began 2025 all-in on cloud computing, its media ambitions now complicate the investment thesis for tech-focused shareholders.