Oracle Valuation Analysis

Place a limit order at $152, and start by building a 20% position.

Regarding the current complex situation of Oracle (ORCL), I have compiled this comprehensive summary report for you. The current ORCL exhibits an extreme divergence between **"exceptionally strong fundamentals vs. extremely panicked market sentiment."

I. Core Valuation Table (Rule #1 Model)

Based on our adjustments for financing interest and dilution, the current valuation benchmark is as follows:

Key Finding: The market's current pricing ($143) only requires Oracle to maintain 15.5% growth in the future. Considering the explosive growth of its AI cloud business, this requirement is actually quite low.

II. Three Major Positives vs. Three Major Negatives

✅ Positives (Why it's a "Good Company"):

Massive Order Backlog: Has a remaining performance obligation (RPO) of $523 billion, which guarantees performance for the coming years.

AI Compute Landlord: OCI cloud service is the preferred choice for major players like NVIDIA and OpenAI.

Valuation Reversion: The stock price has retreated more than 58% from its high, and the P/E ratio has returned to around 20x, its historical average.

❌ Negatives (Why it's still falling):

Massive Financing Pressure: The $50 billion financing plan (half debt, half equity) increases interest burden and dilutes earnings per share.

Insider Apathy: No insider buying at the low of $143; instead, there was frequent selling at $190+ previously.

Technical Wreckage: In a downtrend channel, no clear signs of bottoming with high volume yet, short-term risk of "catching a falling knife" remains.

III. Details of the $50B Financing's Profit "Erosion"

Interest: Quarterly interest expense will increase from $1B to $1.6B.

Dilution: Approximately a 5% new share issuance.

Essence: This is a high-stakes gamble of **"sacrificing short-term profits for long-term growth."** If the March earnings report shows these investments can translate into over 30% OCI revenue growth, the current fear is a buying opportunity.

IV. Investment Strategy Recommendations (For Existing Cash Deployment)

Given the current situation of "cheap valuation but terrible trend," a pyramid-style phased entry is recommended:

First Tranche (Core Position): In the $140 - $143 range. Although not the absolute bottom, the implied growth rate is only 15%, offering defensiveness.

Second Tranche (Add-on): If it falls to $125 - $130. This is a strong technical support level and the upper edge of the adjusted MOS.

Third Tranche (Heavy Position): If extreme market conditions push it below $115. This is an absolute bargain-hunting zone.

V. Key Observation Points

March 8th: Oracle's next earnings release. This is the core event that will determine whether the stock price can reverse.

Insider Activity: Closely monitor if any executives initiate unscheduled buying around $130.

The bottom line: ORCL is now a typical value play characterized by **"excellent fundamentals, short-term financials turning ugly, and prices starting to look cheap."** If you can withstand the pressure on financial statements for the next 1-2 quarters, the odds of winning are high by starting to build a position in phases now.