Is Oracle's Multicloud AI Strategy Powering Sustainable Growth?

Oracle’s ORCL multicloud AI strategy is driving sustainable growth by expanding AI adoption beyond its cloud ecosystem and embedding the company more deeply into enterprise AI workflows.

Oracle is positioning itself as a cloud-neutral AI and data layer rather than a traditional hyperscaler, enabling customers to run Oracle databases and AI workloads across AWS, Azure and Google Cloud. This flexibility is expected to maintain multicloud momentum by supporting adoption among enterprises seeking to reduce single-vendor dependency. By identifying multicloud as the fastest-growing cloud segment, management reinforced confidence in the durability and demand. In second-quarter fiscal 2026, multicloud database consumption surged 817% year over year, reflecting rapidly rising enterprise adoption.

During the fiscal second quarter, Oracle launched two important multicloud initiatives. Multicloud Universal Credits let customers commit once and deploy Oracle database services across any cloud with consistent pricing, while another multicloud reseller program enables purchasing through preferred partners. Combined with expanded multicloud regions, these efforts simplify deployment and support long-term customer stickiness.

The sustainability of this approach is further supported by Oracle’s growing long-term contract commitments, which provide visibility into future demand and reinforce confidence in continued cloud expansion. With cloud revenues contributing roughly 50% of total revenues and RPOs rising year over year, Oracle is gaining clearer multi-year revenue visibility that underpins expectations for continued acceleration.

The impact of Oracle’s multicloud AI strategy is becoming evident in the top-line growth, as the Zacks Consensus Estimate projects total revenues to increase 16.7% in fiscal 2026 and 27.5% in fiscal 2027.

How Rivals Stack Up Against ORCL in Cloud Strategy

Amazon AMZN, through Amazon Web Services, maintains a decisive edge over Oracle in cloud strategy, anchored in massive infrastructure scale, diversified workloads and leadership in AI-driven cloud services. During the third quarter of 2025, AMZN reaccelerated cloud growth to around 20%, with AWS scaling on a $132 billion run rate and benefiting from a sizable $200 billion backlog and rapid capacity build-out. Vertically integrated AI chips and GenAI platforms like Bedrock give AMZN a flexibility and innovation advantage.

Microsoft MSFT remains a leading challenger to Oracle in cloud and AI, benefiting from Azure’s scale advantages and its pervasive footprint across enterprise customers. In the first quarter of fiscal 2026, Azure delivered about 40% growth, while Microsoft Cloud revenues climbed 26%, underscoring accelerating demand. Supported by Windows, Microsoft 365, Dynamics and LinkedIn, MSFT benefits from a data-rich ecosystem. Azure’s leadership in hybrid cloud through Azure Arc and its close OpenAI partnership further strengthen its cloud and AI differentiation versus ORCL.

ORCL’s Price Performance, Valuation & Estimates

Shares of Oracle have declined 34% in the past three months, underperforming both the Zacks Computer and Technology sector’s growth of 4.2% and the Zacks Computer - Software industry’s fall of 14.1%.

ORCL’s 3 Month Price Performance

From a valuation standpoint, ORCL stock is currently trading at a forward 12-month Price/Earnings ratio of 22.81x, which is lower than the industry average of 26.77x. Oracle carries a Value Score of D.

ORCL’s Valuation

The Zacks Consensus Estimate for ORCL’s fiscal 2026 earnings is pegged at $7.42 per share, up by 1.2% over the past 30 days. The earnings figure suggests 23.05% 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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