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Oracle Cloud Expansion in Focus: A Key to Future Momentum?

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Key Takeaways

  • Oracle's cloud revenues rose 27% in Q4 and 24% for FY25, with 40% growth projected in FY26.
  • ORCL plans 47 new data centers, with AWS, Azure and Google Cloud alliances boosting multi-cloud adoption.
  • Oracle's RPO jumped 41% to $138B, with 80% tied to cloud and one-third set to convert within the year.

Oracle (ORCL - Free Report) is making a bold push into the cloud, positioning it as the cornerstone of its next growth phase. In the fourth quarter, total cloud revenues climbed 27% year over year, contributing to a 24% annual increase in fiscal 2025. Looking ahead, management projects cloud revenue growth of over 40% in fiscal 2026. This optimism is fueled by aggressive infrastructure expansion, strategic multi-cloud alliances and surging demand for AI-driven workloads.

A major catalyst for this optimism is Oracle’s aggressive multi-cloud expansion. The company operates 23 data centers today and plans to add 47 more within a year. Its integration with Amazon AWS, Microsoft Azure and Google Cloud enables enterprises to run Oracle Database services across multiple environments, enhancing flexibility and reducing vendor lock-in. This strategy is already delivering results, with multi-cloud database revenues soaring 115% sequentially in the fourth quarter of fiscal 2025.

Oracle’s cloud application portfolio continues to deliver, with Fusion ERP and NetSuite driving double-digit growth. The company is also embedding AI across its cloud stack to meet growing enterprise demand for AI-ready infrastructure, further strengthening its value proposition.

Oracle’s Remaining Performance Obligations (RPO), which climbed 41% to $138 billion, with nearly 80% tied to cloud and one-third set to convert within the next year. Additionally, Cloud@Customer — Oracle’s on-premises offering — saw revenues soar 104% year over year, signaling strong adoption.

Oracle Battles Intense Rivalry in the Cloud Market

Amazon (AMZN - Free Report) -owned Amazon Web Services (AWS) dominates the cloud market with a 31-32% global share, far ahead of Oracle. Backed by over $100 billion in annual data center investment, AWS delivers more than 200 services spanning compute, databases, analytics, AI and custom hardware. In the second quarter of 2025, AWS revenues grew 17.5% year over year to $30.8 billion, beating estimates. Its innovation, security, flexible pricing and vast partner ecosystem reinforce a decisive advantage over Oracle Cloud.

Alphabet (GOOGL - Free Report) -owned Google Cloud Platform (GCP) is gaining ground with leadership in data analytics, AI/ML and open-source technologies. In the second quarter of 2025, Google Cloud saw 32% year-over-year revenue growth and secured a $10 billion Meta contract, underscoring its enterprise momentum. With Vertex AI, Gemini and partnerships with NVIDIA and PayPal, GCP is expanding adoption across industries. GCP’s developer-friendly ecosystem, transparent pricing, global data centers and strong security position it as a formidable rival to Oracle in next-gen cloud and AI infrastructure.

ORCL’s Price Performance, Valuation & Estimates

Shares of Oracle have appreciated 40.4% year to date, outperforming both the Zacks Computer and Technology sector’s return of 12.9% and the Zacks Computer - Software industry’s rise of 15.1%.

ORCL’s YTD Price Performance

Zacks Investment Research
Image Source: Zacks Investment Research

From a valuation standpoint, ORCL appears overvalued, trading at a forward 12-month Price/Sales ratio of 9.45x, which is higher than the Zacks industry average of 8.34x. Oracle carries a Value Score of F.

ORCL’s Valuation

Zacks Investment Research
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ORCL’s fiscal 2026 revenues is pegged at $66.60 billion, indicating 16.02% year-over-year growth. The consensus mark for ORCL’s fiscal 2026 earnings is pegged at $6.73 per share, unchanged over the past 30 days and up by a couple of pence over the past 60 days. The earnings figure suggests 11.61% growth over the figure reported in fiscal 2025.

Zacks Investment Research
Image Source: Zacks Investment Research

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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