Left-handed cloud computing right-handed crossover film and television media Oracle (ORCL.US) stock price climbed the roller coaster, and this year's amplification reached 191%

The Zhitong Finance App learned that 2025 can be described as ups and downs for Oracle (ORCL.US). The stock closed at $166.64 at the beginning of the year and closed at $197.49 on Wednesday Christmas Eve; it hit a low of $118.86 during the year and once reached a high of $345.121, with a range fluctuation of 191%. Towards the end of the year, the stock price rebounded about 11% in just five trading days. This year's “highlights and fluctuations” came not only from cloud computing, but also extended to social media and the Hollywood film and television landscape.

In recent years, Oracle has accelerated the transformation to subscription-based cloud revenue, bringing more predictable cash flow to the company and reducing customers' IT costs and internal expenses. But to support its huge cloud computing ambitions, the company is investing most of its new revenue into capital expenses. From 2011 to 2020, Oracle's revenue grew at an average annual rate of less than 1%, but gross margin reached 75%, average free cash flow rate of 34%, generated a cumulative total of US$118 billion in free cash flow over ten years, and reduced diluted share capital by 41% through repurchases.

Today, growth is shifting gears. The revenue growth rate jumped to 14% in the latest quarter, but it was costly: gross margin fell to 64%, consuming about $10 billion in cash in a single quarter; cash reserves declined, debt rose, and raised $18 billion by issuing bonds in September, and equity rebounded again. The key to the 2025 stock price forecast is a cloud contract of up to 300 billion US dollars reached with OpenAI. The news boosted the stock price for a while, but then investors began to evaluate counterparty risks and Oracle's execution costs, and the stock price entered a long period of adjustment.

At a time when the business is rapidly changing, its founder Larry Ellison is expanding his reach into the media sector. Oracle was previously the cloud service provider for TikTok's US data. According to the deal negotiated this year and expected to be completed in January next year, Oracle will hold 15% of the shares in a new US TikTok entity and will be responsible for retraining its recommendation algorithm based solely on US data.

Meanwhile, the Ellison family is trying to build a film and television empire. In 2006, Ellison's son David Ellison founded Paramount Skydance (PSKY.US). Despite the failure of its initial work, the company has grown into an important producer since 2010, producing many “Mission Impossible” movies.

Chased by victory, the Ellison family then targeted Warner Bros Discovery (WBD.US), but ultimately lost to Netflix (NFLX.US) in the race. In a related note, Warner Bros Discovery mentioned that the Paramount Skydance program is supported by the Ellison Family Trust, and that the trust can withdraw its Oracle shares at any time. This uncertainty concerns management. Since then, Larry Ellison has personally provided $40 billion in cash guarantees for the transaction, and another $30 billion will be provided by private equity agency RedBird Capital and two Middle Eastern sovereign wealth funds.

Looking at the asset structure, if Larry Ellison sells 40 billion US dollars of Oracle shares to raise funds for film and television mergers and acquisitions, it would be equivalent to using technology stocks with a price-earnings ratio of about 26 times and steady profits to replace a traditional media asset that is currently at a loss and has no price-earnings ratio. From a purely financial perspective, this is a “downward replacement.” Warner Bros Discovery owns film and television studios, content distribution, a huge content library, and assets such as HBO and DC Comics. It is also responsible for the declining cable TV business, including CNN. Like CNN, CBS News, owned by Paramount Skydance, is facing the challenges of aging ratings and audiences.

However, in contrast to the decline in the influence of traditional news media, TikTok's ability to reach young people is still expanding. According to Pew Research Center data, 37% of American adults use TikTok, while the usage rate of people under 30 is as high as 63%. If the transaction is completed, the recommendation algorithm is controlled by Oracle, and the potential impact cannot be ignored.

At the beginning of the year, Oracle “bet everything” on cloud computing. Today, the company's story line extends to film, television, and media. Notably, this isn't entirely popular with investors who focus on tech logic.