Oracle & Adobe Earnings Ahead: Which Software Giant Has More AI Upside?

Oracle ORCL) and Adobe ADBE) are arguably the two biggest highlights of this week’s earnings lineup, with both software giants set to report their quarterly results after the market closes on Thursday, September 10.

More importantly, both companies have become prominent ways for investors to gain exposure to the artificial intelligence boom, although from very different angles.

Oracle is benefiting from explosive demand for AI-related cloud infrastructure, while Adobe is embedding generative and agentic AI throughout its industry-leading creative, document, and marketing platforms.

With earnings approaching, the question is whether Oracle’s stronger growth trajectory justifies its premium valuation, or whether Adobe’s steeply discounted stock offers the better opportunity.

Oracle's Explosive Cloud Growth

Expectations are lofty for Oracle’s fiscal Q1, with consensus estimates calling for roughly $19.13 billion in revenue and EPS of $1.74. That sits near management’s guidance for revenue growth of 27%-29% and adjusted EPS of $1.72-$1.76, which would equate to more than 17% year-over-year growth.

Investors will be particularly focused on Oracle Cloud Infrastructure (OCI), as management expects total cloud revenue to surge 58%-64% in U.S. dollars.

This comes as Oracle exited its fiscal 2026 with quarterly cloud revenue rising 47% to $9.9 billion in Q4, including a stunning 93% increase in infrastructure revenue. Annual sales were up 17% to $67.36 billion and are projected to spike another 33% in Oracle's current FY27 based on Zacks estimates.

Furthermore, Oracle's remaining performance obligations (RPO) soared 363% to $638 billion, with much of the increase stemming from large-scale AI contracts. That gives ORCL tremendous revenue visibility, although its aggressive AI data-center spending remains a key risk.

Can Adobe Prove AI Is a Tailwind?

Adobe is expected to post fiscal Q3 EPS of approximately $6.08 on revenue of $6.69 billion, essentially in line with management's guidance for sales of $6.67-$6.72 billion and adjusted EPS of $6.05-$6.10.

Those top-and bottom-line expectations would represent nearly 12% and 14% growth, respectively.

The bigger issue will be Adobe's AI monetization. Despite fears that generative AI could disrupt its traditional creative software franchise, Adobe most recently delivered record Q2 revenue of $6.61 billion, while AI-first annual recurring revenue (ARR) tripled YoY to more than $500 million.

Continued traction across Firefly, Adobe's generative-AI creative platform, could therefore help ease concerns that AI represents more of a competitive threat than an opportunity.

ADBE Has the Clear Valuation Advantage

Adobe wins decisively on traditional valuation metrics. ADBE trades at around 13X forward earnings, offering a sharp discount to the benchmark S&P 500’s 21X, compared with roughly 25X for Oracle.

Adobe's nearly 50% discount to Oracle makes the stock intriguing if management can prove AI is accelerating rather than cannibalizing its growth.

However, Oracle's premium appears more justified by its much faster cloud expansion and enormous AI-driven backlog.

Bottom Line

While Adobe's depressed valuation provides considerable rebound potential, Oracle appears to be the more compelling stock heading into Thursday's results.

Supporting that view, ORCL currently sports a Zacks Rank #2 (Buy), while ADBE lands a Zacks Rank #4 (Sell). Thus, investors may want to wait for further confirmation that Adobe is moving past AI disruption fears, whereas Oracle's surging AI infrastructure demand makes its higher valuation easier to justify.

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

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