Oracle had seen only limited growth in sales over the 2012-2022 period, from $37 billion to $42 billion. But sales will reach $50 billion in fiscal 2023, the highest annual growth rate in a long time.

We all know the old stock market saying: in the midst of a gold rush, rather than miners clinging to the dream, it's shovel and pickaxe salesmen who make fortunes. Oracle, not everyone saw it coming, has already established itself as a world leader in AI thanks to its Gen2 cloud.

Larry Ellison's group is no stranger to cannibalism. Over the past fifteen years, it has bought back half of its outstanding shares, boosting earnings per share from $1 to $3, and increasing Ellison's control to 42% of the capital. 

His valuation is now x34 of earnings. A far cry from the days when it traded at just x8 earnings - as, incidentally, did Microsoft. But that was only ten years ago!

It's worth noting that the development of new services adapted to the computing power needs of artificial intelligence is almost doubling investment, from $4.5 billion in 2022 to $8.7 billion in 2023. Over the coming quarters, we'll have to make sure that this inflation doesn't become structural, at the risk of permanently squeezing profitability. 

Despite the intrinsic quality of its business, Oracle, as usual, is living a little beyond its means. Once again this year, the $28 billion invested in acquisitions - no doubt not unrelated to the record growth rate - required a significant increase in debt. 

Even though its solvency remains rock-solid, the Group is no stranger to this. Over the last fifteen years, it has taken advantage of low interest rates to take on debt and redirect these funds towards numerous acquisitions and massive share buy-backs. The arbitrage made sense, but in the long term, the question inevitably arises as to the sustainability of such a model.

By 2023, Oracle is easing up on share buy-backs - no doubt in the belief that its valuation is now at unattractive levels.