Oracle's Founder Cancels $7.5 Billion Share Sale as Analysts Split Over AI Spending Bill

Larry Ellison abandoned a plan to sell up to 50 million Oracle shares after Q1 results split analysts, with targets ranging from $165 to $252.

Larry Ellison had been ready to part with as many as 50 million Oracle shares — a package worth roughly $7.5 billion — trimming the stake held by the software giant's co-founder and board chairman. On Friday, he scrapped the plan entirely. Not a single share changed hands, and Oracle disclosed no further intention to sell.

For a stock that has already shed 22% this year, the retreat carries weight beyond a routine filing. It reads as a statement of conviction from the most powerful figure at the company — arriving at a moment when Wall Street itself cannot agree on what Oracle is worth.

A Quarter That Split the Street

The divergence in analyst opinion was on full display Friday, one day after Oracle posted fiscal 2027 first-quarter results. Barclays lifted its price target to $252 from $250, citing a growth trajectory that has "inflected." UBS followed, raising its target to $250 from $245. BMO Capital went the other way, cutting to $195 from $220 while keeping a buy rating. Stifel trimmed to $200 from $220, and RBC Capital delivered the sharpest reduction — down to $165 from $190, with a neutral stance. D.A. Davidson initiated coverage with a buy rating and a $180 target.

The spread — from $165 to $252 — captures the unresolved question hanging over Oracle: how much will its enormous cloud buildout dent profitability in the quarters ahead?

The Numbers Behind the Debate

Total revenue climbed 30% to $19.3 billion. Cloud infrastructure revenue, the IaaS line, surged 121% to $7.4 billion, while overall cloud revenue grew 62% to $11.6 billion. Remaining performance obligations — the backlog of contracted work — expanded by $209 billion year over year to reach $664 billion.

Management raised full-year guidance: revenue for fiscal 2027 should reach at least $90 billion, a currency-adjusted increase of 34%. For the current second quarter, Oracle projected revenue growth of 30% to 34% and cloud growth of 64% to 71%. GPU capacity utilization stood at 97.9%, and 850 megawatts of new data center capacity came online during the period.

The company also confirmed capital expenditure guidance of $90 billion to $95 billion, with net cash investment after customer prepayments and financing arrangements not to exceed $70 billion. That spending commitment is precisely where the more cautious analysts dig in: margins face pressure even as revenue races ahead.

Costs Rise Alongside Ambition

Not everything in the report pointed upward. Oracle acknowledged that restructuring costs — tied in part to job cuts — would rise by another $700 million, bringing the total to roughly $2.8 billion for the current fiscal year. Growth, at Oracle, is a literal expense.

Free cash flow remained negative at $5.40 billion, though that figure came in smaller than many had feared, easing concerns about the company's cash burn. Reuters reported that the post-earnings rally was fueled by AI demand and the swelling backlog, with worries about cash outflow subsiding after the better-than-expected free cash flow print.

Oracle also booked more than $30 billion in additional AI cloud contracts and nudged its earnings forecast for the fiscal year slightly higher. According to the company, customers are requesting more training and inference capacity than Oracle can currently supply — a shortage that is both opportunity and risk, driving revenue while demanding heavy investment in data centers and personnel.

A Stock That Won't Sit Still

The market's reaction was far from euphoric. Shares closed Friday at €129.72, down 1.4% on the day. For the week, the stock lost 5.1%; year-to-date, it is down 22%. It sits 55% below its 52-week high of €288.95, reached last September.

The stock trades about 6% above its 50-day moving average, yet with 30-day annualized volatility at 46%, it remains a nerve-wracking hold for anyone trying to draw a clean line between the growth story and the cost burden.

Brussels in the Background

A European regulatory matter continues to simmer. Roughly two weeks ago, it emerged that the European Commission is gathering information about Oracle's software licensing practices. Reuters emphasized that the inquiry is at an early stage and no formal investigation has been opened. The stock has gained 3.1% since the news surfaced — the market appears to assign it little weight compared with the AI growth narrative.

The Question That Remains

Whether the story of insatiable demand for AI computing power outweighs the costs that demand generates is the central puzzle surrounding Oracle. Ellison's withdrawn sale plan offers no definitive answer, but it offers a signal. Someone at the top, choosing not to sell right now, evidently believes the math works out in the end — even if the path there, as last week's swings showed, is anything but straight.

Investors will get their next checkpoint on December 14, when Oracle reports again. Free cash flow will be the number to watch.