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Here's How Much Investing $1,000 In Oracle Stock In 2010 Would Be Worth Today

Wayne Duggan
·3 mins read

Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return for the decade was 250.5%. But there’s no question some big-name stocks did much better than others along the way.

Oracle’s Difficult Decade: One poor performer of the last decade was cloud service stock Oracle Corporation (NYSE: ORCL).

Oracle spent much of the past decade transitioning away from its legacy businesses of on-premise database services, hardware and business software to a new cloud services-centric model.

In 2016, Oracle paid $9.3 billion for cloud pioneer NetSuite. Unfortunately, Oracle’s major investments in cloud services aren’t generating the type of growth investors had hoped. Revenue was flat on a constant-currency basis in fiscal 2020. Cloud license revenue and on-premise license revenues have been particularly weak in recent quarters.

TikTok Drama: The good news for Oracle investors is that the company has made two potentially game-changing deals during the COVID-19 pandemic. First, Oracle landed Zoom Video Communications Inc (NASDAQ: ZM) as a cloud customer earlier this year. Second, Oracle emerged as a winner from a messy bidding war among American companies to partner with popular social media app TikTok.

When Chinese TikTok parent company ByteDance rejected a buyout offer from Microsoft Corporation (NASDAQ: MSFT) and Walmart Inc (NYSE: WMT), Oracle swooped in to secure a deal to become TikTok’s “technology partner.” As part of the deal, Oracle will not have access to TikTok’s prized algorithm, but it will reportedly take a 12.5% ownership stake in TikTok.

Oracle started the 2010s trading at around $25. By mid-2010, the stock had dipped to $21.24, its low point of the decade. By late-2015, Oracle hit $45.71, but it wouldn’t reach the $50 level for the first time for nearly two years. Oracle spent much of 2017 and 2018 trading between $42.50 and $52.50 before breaking out to the upside in early 2019.

Oracle hit its high point of the 2010s in mid-2019 when the stock peaked at $60.50

2020 And Beyond: The COVID-19 sell-off sent Oracle shares tumbling as low as $39.71 in March 2020, but its deals with Zoom and TikTok had the stock back making new all-time highs of $62.60 just this week.

Oracle shares have been a profitable investment over the past decade, but the return isn’t particularly outstanding. In fact, $1,000 worth of Oracle stock in 2010 would be worth about $2,528 today, assuming reinvested dividends.

Looking ahead, analysts are optimistic Oracle will hold onto its 2020 gains. The average price target among the 23 analysts covering the stock is $63, suggesting about 4.2% upside from current levels.

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Photo credit: Raysonho, via WikimediaCommons

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