Back to top

Image: Bigstock

Oracle's NetSuite Momentum: Can It Boost Cloud Growth to New Heights?

Read MoreHide Full Article

Key Takeaways

  • NetSuite revenues jumped 18% y/y in Q4 FY25 to $1.0B, solidifying its role in Oracle's SaaS portfolio.
  • AI-enabled ERP, higher renewals and 100+ AI agents fuel Oracle's SaaS momentum.
  • Oracle projects over 40% cloud revenue growth in 2026, with infrastructure up 70%.

Oracle’s (ORCL - Free Report) NetSuite Cloud ERP has emerged as a major growth catalyst in its cloud strategy, driving strong growth across the applications segment. In the fourth quarter of fiscal 2025, NetSuite revenues climbed 18% year over year to $1.0 billion, reinforcing its critical role within Oracle’s SaaS portfolio. Designed as a multi-tenant, AI-enabled platform, NetSuite centralizes business functions, automates processes and delivers real-time insights — making it a preferred solution for mid-sized organizations.

The shift toward cloud-based, AI-driven ERP solutions is a key growth engine for Oracle. Traditional on-premises systems cannot fully utilize advanced AI features like the company’s AgentX, prompting businesses to transition to NetSuite or Fusion ERP for automation and operational efficiency. Oracle’s integration of over 100 AI agents, coupled with strong bookings and higher renewal rates, positions its SaaS business for sustained acceleration.

This growth aligns with Oracle’s broader cloud acceleration strategy. According to the Zacks model, Oracle’s cloud revenues are expected to grow 29% year over year to $31.6 billion in fiscal 2026, supported by robust infrastructure services that provide a solid foundation for SaaS expansion. Additionally, its RPO is projected to more than double, highlighting a healthy pipeline and robust long-term demand.

Looking ahead, Oracle expects cloud revenues to increase over 40% in fiscal 2026, with infrastructure soaring 70%. Backed by AI innovation, global data center expansion and NetSuite’s scalability, the company is well-positioned to deliver consistent double-digit SaaS growth and reinforce its leadership in the enterprise cloud market.

Oracle's Key Rivals in the ERP Solution

Microsoft’s (MSFT - Free Report) Dynamics 365 stands out for its exceptional integration with the broader Microsoft ecosystem — Office 365, Power BI, Teams, Azure and its low-code Power Platform — providing seamless workflows and strong analytics capabilities. Microsoft’s Dynamics 365 is praised for its versatility, customization options, modular design and scalability across industries and company sizes. Its user-friendly interface reduces training time, while AI-driven insights and Copilot features boost productivity. It is a strong alternative to Oracle because of its cost advantages and close ecosystem bundling.

Meanwhile, SAP SE (SAP - Free Report) maintains a leadership position in ERP, offering a comprehensive functionality suite and deep industry-specific modules that span finance, supply chain, manufacturing and HR. As of early September 2025, SAP commands around 17% of the global ERP market — surpassing Oracle’s share. The company's strategic shift toward cloud and AI has accelerated growth, with cloud ERP sales and order backlog rising sharply amid surging AI adoption. SAP’s strengths lie in its global support network, strong partner ecosystem and ability to tailor solutions for diverse industries.

ORCL’s Price Performance, Valuation & Estimates

Shares of Oracle have appreciated 33.8% year to date, outperforming both the Zacks Computer and Technology sector’s return of 14.1% and the Zacks Computer - Software industry’s rise of 15.3%.

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 8.98x, which is higher than the Zacks industry average of 8.33x. 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 19.38% year-over-year growth. The consensus mark for its fiscal 2026 earnings is pegged at $6.73 per share, holding steady over the past 30 days and up by 2 cents in the last 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Microsoft Corporation (MSFT) - free report >>

SAP SE (SAP) - free report >>

Oracle Corporation (ORCL) - free report >>

Published in