narrowmoat oracle’s orcl fourth quarter exceeded expectations on the top and bottom lines as the growth rate of its nascent cloud infrastructure business nearly doubled from last year showing solid health nonetheless our concerns remain for what we believe is a more limited upside to the cloud infrastructure market than what the market is baking in even with this concern in mind we are raising our fair value estimate to 76 from 67 per share after accounting for the time value of money as we roll our model ahead however with shares up by more than 80 over the trailing 12 months we still strongly believe they are significantly overvalued in 1star territory we reiterate our belief that oracle is a moaty sticky company but we still think switching costs are vulnerable in its core enterprise resource planning and database markets as enterprises shift their workloads to the cloud spurring them to think about how to best meet their software needs earnings per share exceeded management’s guided midpoint by a moderate 006 while revenue increased by 17 year over year to 138 billion the highlight of the quarter was the acceleration of cloud infrastructure growth which rose 77 year over year notably consumption of gen 2 cloud infrastructure is now seven times larger than it was in 2020 we think these metrics are strong but the health of this newer business for oracle over the next few years is not our primary concern ultimately we look to the long term where we think the potential of its cloud infrastructure business is capped we believe oracle’s larger cloud infrastructure competitors have ample firstmover advantages and that more general workloads will be harder to compete for