Oracle's Multi-Cloud Push Intensifies: A Key Driver of Cloud Demand?

Oracle’s ORCL multi-cloud strategy is fast becoming a powerful catalyst for long-term growth. By integrating Oracle Cloud Infrastructure (OCI) with hyperscalers such as Amazon Web Services (AWS), Microsoft Azure and Google Cloud, the company has created a flexible and scalable environment that enables enterprises to run databases and applications seamlessly across multiple platforms. This compatibility is driving strong demand for Oracle’s infrastructure and boosting recurring cloud revenues. For the second quarter of fiscal 2026, the company expects total cloud revenues to grow from 32% to 36% in constant currency and from 33% to 37% in USD.

In the first quarter of fiscal 2026, Oracle’s multi-cloud database services saw explosive growth, surging over 1,500% year over year. The company’s partnerships, particularly the Oracle Database@Azure initiative and a new Oracle Database@AWS launch, are expanding its reach and helping enterprises leverage the best of multiple ecosystems. This strategy is broadening Oracle’s market presence.

Looking ahead, Oracle’s upcoming Multi-Cloud AI Database is expected to further accelerate adoption. The new Oracle AI Database, set to debut at Oracle AI World, will allow customers to use large language models such as Google’s Gemini, OpenAI’s ChatGPT and xAI’s Grok directly on Oracle databases — unlocking new ways to extract value from enterprise data.

To sustain this momentum, Oracle is investing heavily by adding 37 new multi-cloud data centers and expecting OCI revenues to grow 77% year over year to $18 billion in fiscal 2026. With the Zacks model forecasting overall revenue growth of 16% in 2026 and 21% in 2027, the company’s multi-cloud expansion looks well-positioned to deliver lasting upside.

How Rivals Stack Up Against ORCL in Cloud Strategy

Microsoft MSFT Azure challenges Oracle in cloud strategy through its deep integration with Microsoft products like Office 365, SQL Server and Windows. Microsoft’s hybrid-cloud dominance, $47 billion cloud revenues and bold AI expansion, highlighted by new “Fairwater” datacenters and a $30 billion U.K. investment, underscore its leadership. With advanced Copilot AI tools and unmatched enterprise reach, Microsoft Azure delivers scale, innovation and flexibility, positioning Microsoft as the clear long-term powerhouse in cloud strategy ahead of Oracle.

Alphabet’s GOOGL Google Cloud Platform (GCP) rivals Oracle with its dominance in AI, data analytics and open-source innovation. GCP leverages Google’s global infrastructure, BigQuery and TensorFlow to power data-intensive workloads. With $85 billion in planned 2025 capital spending — two-thirds for AI-focused datacenters — Alphabet is scaling aggressively through custom TPUs and major deals with Meta and OpenAI. Alphabet’s AI-centric strategy, hybrid-cloud flexibility and relentless innovation firmly position GCP as a powerful, next-generation challenger to Oracle’s enterprise cloud ambitions.

ORCL’s Price Performance, Valuation & Estimates

Shares of Oracle have surged 70% year to date, outperforming both the Zacks Computer and Technology sector’s return of 24.1% and the Zacks Computer - Software industry’s rise of 22.3%.

ORCL’s YTD Price Performance

From a valuation standpoint, ORCL appears overvalued, trading at a forward 12-month Price/Earnings ratio of 40.11x, which is higher than the industry average of 33.76x. Oracle carries a Value Score of F.

ORCL’s Valuation

The Zacks Consensus Estimate for ORCL’s fiscal 2026 earnings is pegged at $6.77 per share, reflecting a 4-cent increase over the past 30 and 60 days. The earnings figure suggests 12.27% growth over the figure reported in fiscal 2025.

ORCL stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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