Oracle shares are up 97% this year. Are they still worth buying after the CEO change?

After almost doubling its capitalization since the beginning of 2025, Oracle has decided to revamp its management - and appointed two new CEOs at once. Wall Street analysts assess Oracle's personnel reform positively, but warn of high uncertainty in the AI segment.

Safra Catz, who had been Oracle's CEO since 2014, has stepped down from her position but remains with the company as executive vice chairman. In her place, the company appointed two new CEOs: Clay Maguirk, who previously led Oracle Cloud Infrastructure (OCI), and Mike Sicilia, who led Oracle Industries. This staffing decision is not new to Oracle, MarketWatch notes: Katz herself shared the CEO post with Mark Hurd until his death in 2019.

Oracle shares jumped 6% on the news of the management change. Since January, Oracle quotes have soared 97%. The main driver of this rally was a frenzy of demand for Oracle's cloud services, fueled by the AI boom, writes Morningstar. Improved long-term outlook, a major cloud capacity lease with OpenAI and a record $455 billion portfolio of contractual commitments were also important catalysts, the agency said.

Morningstar analyst Luke Young predicts that OCI and Oracle Cloud will account for more than 85% of Oracle's revenue by fiscal 2030. With the massive growth of OCI, he says, Oracle's business profile is becoming more and more similar to that of other hyperscalers such as Microsoft, Amazon and Google. Compared to them, however, Oracle's cloud business should expand faster over the next few years, which will be a "tailwind" for the stock, Young said. Oracle shares are now priced close to fair value at $330 a share, but investors should consider the risk of customer order withdrawals in the future and the volatile AI landscape, the analyst warned.

Bernstein analyst Mark Merdler said Maguirk and Sicilia know the business well and importantly, Katz remains at the company. "We believe this move expands Oracle's management team, with Larry (Oracle founder Larry Ellison) and Safra (Katz) continuing to drive strategy and provide business discipline," MarketWatch quoted Bernstein analyst Bernstein as saying.

The model of management with two CEOs is not new to the IT industry, but this experience has not always been successful, Bloomberg notes. Salesforce founder and CEO Marc Benioff has twice tried to implement a co-CEO model, and both attempts failed. At SAP, Jennifer Morgan left a similar position less than a year after her appointment.

This article was AI-translated and verified by a human editor