How I Made $5000 in the Stock Market

A Topsy-Turvy Year for Oracle and the Ellisons Will Bleed into 2026

Dec 22, 2025 14:49:00 -0500 by Adam Levine | #Technology

After moving the software company he co-founded to cloud computing, Larry Ellison is now getting into media. (Andrew Harnik/Getty Images)

Key Points

Oracle has had a wild year. Ending 2024 with its stock at $166.64 and currently sitting at $198.41 during midday Monday trading, the stock has zigzagged from a 2025 low of $118.86 to a high of $345.72, for a spread of 191%. But as we close the year out, shares have rallied 11% in three days. The highlight reel includes cloud computing, social media, and Hollywood studios.

The year began with the same dynamic seen in 2024. The enterprise software giant was shifting to becoming a cloud company. It is in the process of moving its customers from packaged software to cloud-based versions. This gives Oracle a more reliable revenue stream, and provides customers with more cost predictability and fewer internal IT expenses. Along with that, Oracle also began building data centers to rent to customers in the cloud, competing with Amazon Web Services, Microsoft’s Azure, and Google Cloud.

In the process, Oracle is radically changing its financials. Its sales grew at an average rate of under 1% from 2011 to 2020, but came in at an average 75% gross margin. The company had more cash than debt, and an average free-cash-flow margin of 34%. It generated $118 billion in free cash flow in that decadelong period, and reduced the diluted share count by 41% through share buybacks.

But all those measures are shifting with the substantial capital expenditures required to become a cloud giant. Growth has sprung up to 14% in the last quarter, a number that will likely continue rising. But it comes at a cost. Gross margin has dipped to 64%, and Oracle burned through $10 billion in cash in the quarter. Cash holdings are falling and debt is rising, augmented by an $18 billion bond sale in September. The share count is increasing again.

Crucial to Oracle stock’s 2025 was a $300 billion cloud contract with OpenAI, a start-up that doesn’t have $300 billion, nor a clear path to getting it aside from massive equity investments at a very high valuation. In addition to its Oracle contract, OpenAI has over a trillion dollars in multiyear commitments. According to Goldman Sachs, OpenAI will have around $20 billion in 2026 sales, and $114 billion in costs.

While Oracle stock initially soared on the deal, it went into an extended slump as investors evaluated the counterparty risk that OpenAI posed, and Oracle’s costs of fulfilling the contract should it go through.

Amid this rapid change at Oracle, Chairman Larry Ellison is getting his fingers into media. Oracle was already the cloud provider for U.S. data from TikTok, the video-sharing platform owned by the Chinese company Bytedance. With a deal negotiated this year and due to close in January, it looks like Oracle will become a 15% owner of a new U.S. TikTok entity. While it is a relatively small stake, Oracle will be responsible for retraining the TikTok recommendation engine on U.S. data only.

Now Ellison and his son, David, are trying to build a Hollywood media empire. In 2006 David Ellison founded Skydance, a film production company originally conceived to prop up his failing acting career with the movie Flyboys, starring Ellison and James Franco. It was a flop, but since 2010, Skydance has nevertheless become an important film producer, churning out hits like five Mission: Impossible movies among many others.

Though a smaller company than Paramount, David Ellison was able to leverage a $6 billion investment from his father into a purchase of the fabled-but-troubled Hollywood studio. That deal closed in August at a total enterprise value of $28 billion.

Off that victory, the Ellisons have set their sights on a bigger Hollywood target: Warner Bros. Discovery . Paramount Skydance was one of the bidders for this other reeling old media target, but lost out to Netflix . The Ellisons are maintaining their offer, $30 a share in cash, as a hostile offer to Warner shareholders.

One of the reasons cited by Warner management for choosing Netflix over Paramount was that the Paramount deal was backed by the Ellison Family Trust, where Larry Ellison’s 1.2 billion shares of Oracle reside, valued around $230 billion. But it is a revocable trust, which means that the Ellisons can pull the shares out any time they like, and that made Warner management nervous.

To address that concern, on Monday Larry Ellison personally guaranteed $40 billion of the cash deal. Another $30 billion would be provided by private-equity company Redbird, which was also part of the Paramount deal, as well as two Middle Eastern sovereign wealth funds.

Warner comes with the movie and TV studios, film distribution, the largest Hollywood content library, HBO, DC Comics, and a big set of declining cable channels that were originally part of Discovery and Turner Communications, a 1996 acquisition that included CNN.

If Larry Ellison sells $40 billion of Oracle to pay for Warner, he would be trading in shares of a company that has a 26 price-to-earnings ratio for the next 12 months for shares of a company with a 14 ratio. Strictly looking at the finances, it looks like the Ellisons are trading down.

But this may be more part of a political project. Larry Ellison has a close relationship with President Donald Trump, and he is trying to leverage that to make the Paramount-Warner deal happen.

Paramount owns CBS News, and David Ellison has driven it in a direction more friendly to the White House. To run CBS News, he hired Bari Weiss, who founded The Free Press, a collection of conservative Substack blogs. On Sunday, at the last moment, she pulled a 60 Minutes story that may have been damaging to the president’s deportation tactics. CBS claimed that the story needed more reporting.

CBS News and CNN are legacy new outlets that get poor ratings with bad demographics. In last place among the broadcast networks’ nightly news programs, CBS Evening News averaged around 4.2 million viewers in November, with only about a half million in the crucial 25 to 54 demographic. CNN prime time shows averaged 556,000 viewers with only about 100,000 of that in the demo. The salience of both news organizations is waning.

But TikTok has greater reach, and its recommendation engine, to be under Larry Ellison’s control if the TikTok deal is completed, can influence younger people’s political opinions. According to a survey by the Pew Research Center, 37% of U.S. adults use TikTok, but that rises to 63% for adults under 30. TikTok is still bested by Google’s YouTube and Meta Platform’s Instagram.

Write to Adam Levine at adam.levine@barrons.com