Markets periodically reward stories instead of businesses. Few examples illustrate this better than Luminar Technologies. In December 2020, during the height of SPAC mania, Luminar shares peaked at approximately $627, driven by enthusiasm around autonomous driving narratives rather than sustainable earnings or cash flow. At the time, the company lacked durable profitability, rendering traditional valuation metrics meaningless.

Fast forward to today, Luminar trades near $1 per share following severe financial deterioration and a Chapter 11 bankruptcy filing. The arc from hype to collapse reinforces a timeless lesson: capital eventually flows away from companies without earnings power, balance sheet strength, and cash discipline, regardless of how compelling the narrative once sounded.

At Italkstocks, this is precisely why we avoid “story stocks” and focus on businesses with proven durability. Oracle is the opposite of Luminar in every fundamental sense, and that distinction is not subtle.

Why We Are Long and Strong Oracle (ORCL)

Oracle operates with real earnings, recurring revenue, and balance sheet resilience. The company generates tens of billions in annual revenue, with a substantial portion coming from long term enterprise contracts, database licensing, and rapidly growing cloud infrastructure and cloud applications. This revenue base is sticky, mission critical, and embedded deeply into global enterprise operations.

From a balance sheet perspective, Oracle stands out. The company produces strong and consistent operating cash flow, which comfortably services debt, supports shareholder returns, and funds strategic investment. Oracle’s leverage is intentional, manageable, and backed by predictable cash generation, not speculative projections. Unlike unprofitable growth companies, Oracle does not rely on capital markets goodwill to survive downturns.

Equally important, Oracle’s capital allocation reflects maturity and discipline. The company has demonstrated the ability to return capital through buybacks and dividends while still investing aggressively in cloud infrastructure, particularly Oracle Cloud Infrastructure, which continues to gain share against hyperscale competitors in specialized workloads.

The Broader Lesson

Luminar’s collapse was not bad luck. It was the inevitable outcome of owning a company without earnings durability in a tightening financial environment. Oracle’s strength is not based on hope or optionality. It is based on cash flow, contractual revenue, balance sheet capacity, and execution.

This is why we remain long Oracle. In volatile markets, strong balance sheets are offense and defense at the same time. They allow companies to survive, invest, and compound while weaker competitors disappear. Investors who ignore this lesson often relearn it the hard way.

At Italkstocks, we prefer businesses that can endure cycles, not stories that depend on them.