Core Viewpoint - Oracle's stock has surged 10% recently, reaching $221.53, but this valuation appears stretched compared to its fundamentals, suggesting a potential price correction to around $156 may be prudent [2][3]. Valuation - The current stock price reflects aggressive expectations for future growth, creating a risk-reward imbalance where upside potential is limited and downside risk increases if growth underperforms [3][4]. Growth - Oracle has demonstrated strong operational performance, with a 10.2% average growth rate in revenue over the past three years, and a 9.7% increase in revenues from $54 billion to $59 billion in the last 12 months [9]. - Quarterly revenues rose by 12.2% to $15 billion from $13 billion year-over-year [9]. Profitability - Oracle's operating income for the last 12 months was $19 billion, reflecting an operating margin of 31.6% [10]. - The company generated approximately $12 billion in net income, indicating a net margin of roughly 21.1% [10]. Financial Stability - Oracle's current market capitalization stands at $626 billion, with $105 billion in debt, resulting in a debt-to-equity ratio of 16.9% [12]. - The cash-to-assets ratio is 6.1%, with cash and cash equivalents amounting to $11 billion of total assets of $180 billion [12]. Resilience - Oracle has shown more resilience than the S&P 500 during economic downturns, recovering fully from significant declines in past crises [11][13].

Core Viewpoint - Oracle's stock has experienced a significant decline of 7% in a single day, currently priced at $257, following a substantial increase of over 80% in the past six months due to a major cloud computing contract with OpenAI valued at $300 billion over five years [2][3]. Financial Performance - Oracle's revenue has shown strong growth, increasing at an average rate of 10.2% over the past three years, with a 9.7% rise from $54 billion to $59 billion in the last 12 months [5]. - The latest quarterly revenue reached $15 billion, marking a 12.2% increase from $13 billion a year prior [5]. - The company's operating income for the last 12 months was $19 billion, resulting in an operating margin of 31.6% [8]. - Oracle generated nearly $22 billion in operating cash flow, with a cash flow margin of 36.5% [8]. - The net income for the same period was approximately $12 billion, indicating a net margin of around 21.1% [8]. Valuation Concerns - The current valuation of Oracle is considered relatively high, with a target price suggested at $183, indicating potential valuation risk [3][4]. - The company's market capitalization stands at $726 billion, with a debt of $105 billion, leading to a debt-to-equity ratio of 14.3% [8]. Resilience and Recovery - Oracle has demonstrated greater resilience compared to the S&P 500 during various economic downturns, recovering fully from significant drops during the 2008 financial crisis, the COVID-19 pandemic, and the 2022 inflation shock [6][9].

Core Insights - A consortium led by Oracle, Silver Lake, and Andreessen Horowitz plans to acquire 80% of TikTok's US operations to prevent a ban in the US [2][3] - Oracle's stock has increased by 21% over the past month, supported by a strong five-year forecast and a 359% year-over-year rise in remaining performance obligations (RPO) to $455 billion [2][10] - The current market capitalization of Oracle is $852 billion, with a diverse range of offerings including cloud software applications and enterprise databases [5][10] Valuation - Oracle's stock valuation appears very high, raising questions about its attractiveness at the current price level around $300 [4][6] - The company has demonstrated strong operating performance and financial health, but its current valuation may be considered expensive [4][10] Growth - Oracle has experienced an average top-line growth rate of 10.2% over the past three years, with revenues increasing from $54 billion to $59 billion over the last 12 months [10] - Quarterly revenues rose by 12.2% to $15 billion in the most recent quarter compared to $13 billion a year prior [10] Profitability - Oracle's operating income over the last 12 months was $19 billion, resulting in an operating margin of 31.6% [10] - The company generated approximately $12 billion in net income, indicating a net margin of about 21.1% [10] Financial Stability - Oracle had $105 billion in debt at the end of the last quarter, leading to a Debt-to-Equity Ratio of 12.3% [10] - The company's cash (including cash equivalents) constitutes $11 billion of $180 billion in total assets, resulting in a Cash-to-Assets Ratio of 6.1% [10] Resilience - Oracle has shown greater resilience than the S&P 500 index during various economic downturns, recovering quickly from declines [8][11]