Oracle (ORCL) is the latest mega-cap tech name putting up truly outstanding returns on the promise of artificial intelligence (AI), but long-time shareholders know ORCL stock has been a market-beating machine for ages.
Founded in the late 1970s, Oracle really hit its stride during the dot-com boom when it became dominant in database management systems. After the bubble burst, the company pursued an aggressive policy of acquisitions, scooping up software and hardware firms such as PeopleSoft and Sun Microsystems.
Oracle's voracious appetite transformed the company into what's known as a full-stack provider, offering enterprise customers everything from software and middleware to databases and hardware. But the acquisitions were also very expensive, pressuring margins at a time when year-over-year revenue growth was hard to come by.
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Happily for Oracle shareholders, the company pivoted toward cloud computing. Undaunted by competition from the likes of Amazon.com's (AMZN) Amazon Web Services, Microsoft's (MSFT) Azure and Alphabet's (GOOGL) Google Cloud, Oracle launched Oracle Cloud Infrastructure (OCI) to provide cloud-based services for a range of enterprise needs.
When AI exploded on the scene at the end of 2022, Oracle was well positioned to take advantage of the industry's insatiable demand for computing power.
Today, Oracle has a $455 billion pipeline of contracts to supply computing power for AI. Indeed, the tech stock practically went vertical in September 2025 after the enterprise database and cloud-services provider signed a massive deal with OpenAI. The latter, which is best known for ChatGPT, agreed to buy $300 billion in computing power from Oracle over five years.
"Oracle has now partnered with the big three hyperscale cloud providers," writes Argus Research analyst Joseph Bonner, who rates shares at Buy. "It is realizing its vision of meeting its customers wherever they choose, with fully optimized performance, operability and connectivity among any and all compute surfaces."
Joining the AI gold rush allowed ORCL stock to gain 70% through the first nine months of 2025, adding about $400 billion in market cap in the process. By comparison, Buy-rated Dow Jones stocks Cisco Systems (CSCO) and International Business Machines (IBM) have market caps of about $265 billion apiece.
Thanks to ORCL's surging stock price, Executive Chairman Larry Ellison is now estimated to be the second richest person in the world after Elon Musk.
The bottom line on Oracle stock?
Oracle kind of found itself out of the conversation over the past few years. Legacy tech companies couldn't really compete for attention when the Magnificent 7 got all the glory as AI plays.
And yet ORCL stock has done very well by shareholders for a very long time.
Over its entire life as a publicly traded company, ORCL generated an annualized total return (price change plus dividends) of 19.6%. That clobbers the S&P 500's return of 10.8% over the same time frame.
Even better, ORCL stock leads the broader market by wide margins over the past one-, three-, five-, 10- and 15-year periods too.
And as for the past two decades? Oracle stock has been a big-time buy-and-hold winner.
Have a look at the above chart and you'll see that if you invested $1,000 in Oracle stock 20 years ago, today your stake would be worth about $29,000 – good for an annualized total return of 18.2%.
The same amount invested in the S&P 500 would theoretically be worth about $8,000 today, or an annualized total return of 10.9%.
Wall Street likes Oracle's chance of maintaining its market-beating ways. Of the 40 analysts covering ORCL stock surveyed by S&P Global Market Intelligence, 22 call it a Strong Buy, five say Buy, 12 rate it at Hold and one says Strong Sell.
That works out to a consensus recommendation of Buy, with strong conviction to boot.
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