Relentless Leadership Drives Oracle Stock’s 100,000% Return

Editor’s note: This is part 11 of a 13-part series about companies whose shares have amassed 100,000% returns for investors and the path taken to generate such impressive gains over the long term. See below for links to the other stocks in this series.

Oracle (ORCL) is a leader in cutting-edge relational database technology, and the company’s commitment to continuous innovation and investment in technology is what has made it a leader.

The original name of the company, which was founded in 1977, was Software Development Laboratories – an homage to its roots in the rigors of computer science.

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The company released its first product in 1979 and its first two customers were the Air Force and the CIA, which provide testimony to the revolutionary nature of relational databases.

They were never offered before and they enabled the creation of links between data sets that allowed users to gain unprecedented insights from unprecedented amounts of data.

Since relational databases were focused on managing large datasets, their customer base was self-selecting: The largest companies in the world used Oracle software.

A phone company could gain insights from data for billions of calls. An airline could manage hundreds of millions of reservations and a manufacturing company could keep tabs on the production data on, say, a million units of finished product.

The value and utility of relational databases drove Oracle sales. But there was another factor at work. The relentless drive of Oracle’s mercurial co-founder Larry Ellison.

Ellison is a gifted innovator and leader but also hyper-competitive and many of the company’s aggressive sales tactics stemmed directly from this drive.

These included threatening licensing audits, bundling products into groups that exceeded customers’ needs, renewal efforts that threatened longer-term contracts if early offers were not accepted, and, of course, a young aggressive sales force led by managers who frequently got calls from Ellison himself.

While some of these tactics were questionable, they did their job in one respect: they drove sales at Oracle.

But Ellison’s vision paid off as well. He understood early on the importance of cloud computing, and as early as 2012, shifted the company’s focus away from so-called on-premise computing to a software-as-a-service (SaaS) model.

While cloud computing has not killed off on-premise computing, it has relegated it to a smaller sector of the market, and Oracle dominates cloud-based enterprise-wide solutions. Further, it killed many on-premise software companies that did not embrace cloud computing quickly enough.

And Ellison’s vision paid off again with AI. His embrace of the technology as early as 2020 by reconfiguring Oracle products means that today, its Gen2 Cloud solution is the leading infrastructure for managing generative AI workloads.

Oracle’s investments in technology, commitment to innovation as technology shifts and its relentless marketing machine have shown up on the company’s top and bottom line.

Since 2005, revenues have grown from $11.7 billion to $49.9 billion for the year ended 2023.

Should AI technology live up to its billing, Oracle could have another significant leg up in its growth. Even if the AI market is slower to develop than anticipated, Oracle is well-positioned to be present if and when it takes off.

Note: This content first appeared in Louis Navellier’s latest book, The Sacred Truths of Investing: Finding Growth Stocks that Will Make You Rich, which was published by John Wiley & Sons, Inc.