Larry Ellison’s net worth continued falling this week as Oracle’s (NYSE:ORCL) stock retreated to its lowest level since April 13. It has dropped by 57% from its highest point in September last year amid concerns about its artificial intelligence (AI) financing.

Oracle Stock Retreat is Punishing Larry Ellison’s Wealth

Ellison, the billionaire founder of Oracle, has lost billions of dollars in wealth. According to Bloomberg, his net worth has fallen by more than $45.4 billion this year, making him one of the world’s worst-performing billionaires.

Ellison, who briefly became the wealthiest person in the world last year, now has a net worth of over $202 billion. He is the sixth-richest person in the world after Elon Musk, Larry Page, Sergey Brin, Jeff Bezos, and Michael Dell.

The ongoing retreat is happening because of Oracle’s performance as its stock has tumbled by 57% from its peak last year amid concerns about AI financing. 

Its most recent results showed that its Remaining Performance Obligations (RPO) jumped by $84 billion in the fourth quarter to $553 billion as it became one of the top AI infrastructure providers in the industry. Its revenue jumped by 21% to $19.2 billion, driven by its cloud revenue.

The main concern among investors is that the soaring backlog has pushed its capital expenditure higher. Capex jumped by 162% last year, with its free cash flow being negative $24 billion. Its debt has also jumped to over $130 billion and the management expects to raise $40 billion in this financial year.

Investors are also concerned about its exposure to OpenAI, the creator of ChatGPT. Media reports suggest that OpenAI is considering delaying its IPO as the management seeks to boost its valuation to over $1 trillion. This overhaul may see it scale down its huge spending commitments, which may affect Oracle.

Despite the ongoing retreat, analysts are largely bullish on the ORCL stock. Data compiled by Benzinga shows that the consensus target is $268, higher than the current $148. 

Technicals Point to ORCL Stock Weakness

ORCL stock chart | Source: TradingView

The weekly chart suggests that the ORCL share price may drop further in the coming months. That’s because it has formed a multi-month head-and-shoulders pattern and is nearing its neckline. It has also moved below the 50-week and 100-week Exponential Moving Averages (EMA), while the Relative Strength Index (RSI) has dropped below the neutral point of 50 and is pointing downwards.

Therefore, these patterns suggest that the stock will drop further, potentially to the psychological point at $100. Such a move will hit Ellison’s net worth lower as he is the biggest holder with a 40% stake in the company.

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