Diamond: Oracle
The Oracle at Delphi preceded Larry Ellison’s version by a good 3,000 years, and one of the maxims inscribed in the forecourt of the Temple of Apollo can be translated roughly as “Nothing in Excess”.
It’s unclear what constitutes excess when your net worth is pushing $400bn, but Larry certainly doesn’t mess around, with six marriages, jets and yachts for every day of the week, and a property portfolio including 98% of the sixth largest island in Hawaii, the Indian Wells Tennis Garden and the Astor family’s humble cottage in Newport.
The Delphic Oracle specialised in looking into the future, and Larry’s version can claim to be following in that noble tradition after a huge pivot into cloud computing and AI infrastructure. Larry himself may not have been the earliest of adopters, famously going on record to describe cloud computing as “complete gibberish”, but Oracle has clearly gone all in and has rapidly become a real rival to the likes of Amazon and Microsoft in contracts for gigantic data centres.
Oracle stunned the market with an earnings report that announced its contract pipeline with AI groups had grown from $138bn three months ago to a staggering $455bn.
Much of this relates to a five-year deal with OpenAI worth a reported $300bn, so it’s clearly a bet on the ChatGPT maker’s ability to raise capital on that sort of scale, as well as on Oracle’s ability to deliver on such substantial promises. But it’s clearly a bet that the market likes, with Oracle’s share price up 36% on the day of the announcement.
Dog: Ørsted
Something is indeed rotten in the state of Denmark, but these days it’s a bit more corporate than a troubled prince mooning around on the ramparts after his father’s ghost.
Denmark’s prosperity and its citizens’ standard of living have increasingly become dependent on a handful of successful multinational companies such as Lego, Carlsberg, AP Moller-Maersk, Ørsted and, particularly, Novo Nordisk, which became Europe’s most valuable company last year. The revenues of the 10 largest companies account for about 45% of Denmark’s GDP, so when a couple of them have a wobble it’s a material issue.
Novo Nordisk has lost its lead in the US obesity drug market to Eli Lilly, and has announced 9,000 job cuts, half of which will be in Denmark. But its troubles look like minor ripples compared with the waves swamping Ørsted.
The world’s largest offshore wind developer was riding high when governments were pouring money into renewable energy, but the mood has changed, led by the implacable opposition of President Donald Trump to anything other than good old-fashioned fossil fuels.
The company has been forced to go back to shareholders to raise $9bn, amounting to 75% of its market value in new capital.
Costs have shot up with higher interest rates, there have been supply chain issues and, in August, the US government ordered Ørsted to stop work on its $1.5bn Revolution Wind project off Rhode Island, despite it being 80% complete. It announced 800 job cuts last year, with further cost cutting planned this year. Amid all the gloom, its share price is down about 80% from its 2021 peak.
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