Oracle Stock Event Study

Yuting Wu

2025-09-11

Background

Oracle’s stock price soared by about 40% in a single day due to the announcement of its cooperation with OpenAI,Nvdia and Google. Larry Ellison briefly became the world’s richest man.

Analysis Objectives:

  • Quantify abnormal returns on and around the event date
  • Visualize stock price trends and cumulative abnormal returns
  • Provide preliminary interpretation

stock chart of Oracle & SPY

Cumulative Abnormal Return (CAR)

Preliminary Interpretation - Part 1

  • Short-Term Market Reaction
    Cumulative abnormal returns on and around the event date were approximately 39.8% → Significant news-driven gains

  • Note
    The event window is truncated at the end of the data; long-term sustainability requires consideration of indicators such as RPO conversion and cloud business profitability.

Preliminary Interpretation - Part 2

  • Investment Implications
    The market has high expectations for AI contracts and cloud computing power, but caution remains regarding the gap between valuations and actual performance.

  • Key Takeaways

    • Event-driven abnormal returns are significant
    • Long-term performance requires monitoring
    • Valuation concerns persist despite positive news