We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Salesforce vs. Oracle: Which Cloud Software Stock Has the Edge?
Read MoreHide Full Article
Key Takeaways
Oracle posts faster cloud and AI growth, with revenues up 12% and cloud infrastructure rising 54%.
ORCL cites multi-billion-dollar tech contracts and new AI platforms as key drivers of momentum.
Oracle expects heavy infrastructure spend in fiscal 2026, which may pressure near-term free cash flow.
Salesforce (CRM - Free Report) and Oracle (ORCL - Free Report) are two of the biggest names in the cloud software market. Both companies offer powerful, enterprise-grade platforms spanning customer relationship management, enterprise resource planning, database management and artificial intelligence (AI)-powered cloud solutions.
Both companies have transformed how businesses manage operations, customer relationships and data infrastructure. With the digital transformation wave accelerating, the question remains: Which stock makes a better investment pick today? Let’s break down their fundamentals, growth prospects and market challenges to determine which offers a more compelling investment case.
The Case for Salesforce Stock
Salesforce has long held the top position in the customer relationship management market, according to Gartner. The company’s vision now goes beyond customer management, and it is building a broader ecosystem focused on AI, data and collaboration. Acquisitions like Waii, Bluebirds, Informatica and Slack show Salesforce’s push to evolve into a more complete enterprise platform.
AI is now central to Salesforce’s growth story. Since the 2023 rollout of Einstein GPT, Salesforce has been embedding generative AI across its offerings to help companies automate processes, improve decision-making and strengthen customer relationships.
Its latest innovation, Agentforce, is gaining momentum. Combined with Data Cloud, these AI-driven offerings brought in $1.2 billion in recurring revenues in the second quarter of fiscal 2026, up 120% year over year. More than 40% of Agentforce deals came from existing clients, showing Salesforce’s success in cross-selling AI features to its user base.
Another long-term tailwind is rising global spending on generative AI. Gartner estimates that worldwide generative AI spending will hit $644 billion in 2025, implying a 76.4% year-over-year increase. Enterprise software, a key segment for Salesforce, is expected to grow even faster, with a projected increase of 93.9% to $37.16 billion, per the Gartner report.
On the financial front, Salesforce’s revenue growth has slowed down. However, this is not because of any company-specific issues but due to macroeconomic headwinds. Enterprise customers are tightening their IT budgets due to fears of an escalating tariff war and slowing economic growth. In the first half of fiscal 2026, revenues rose just 8.7% year over year, and non-GAAP earnings per share (EPS) grew by only 9.4%.
Oracle is also becoming more active in the AI space, which is driving its overall financial performance. In the first quarter of fiscal 2026, the company’s revenues soared 12% year over year to $14.9 billion. More significantly, cloud revenues climbed 27% to $7.19 billion, with cloud infrastructure revenues specifically expanding 54% to $3.35 billion. Management provided remarkably ambitious guidance, projecting Oracle Cloud Infrastructure revenues to grow 77% to $18 billion in fiscal 2026, subsequently climbing to $32 billion, $73 billion, $114 billion and ultimately $144 billion over the following four years through fiscal 2030.
This aggressive outlook stems from several multi-billion-dollar contracts signed during the quarter, including partnerships with major technology companies. Over the past few months, Oracle has been awarded significant cloud contracts from major tech companies, including OpenAI, xAi, Meta Platforms, NVIDIA and Advanced Micro Devices.
To build on this momentum, Oracle has been continuously launching new and innovative products. Last month, the company unveiled Oracle AI Database 26ai, featuring native vector search capabilities and deeper interoperability with open standards, including Apache Iceberg and Model Context Protocol. It also unveiled Oracle AI Data Platform, which integrates generative AI models with enterprise data, simplifying the complex data preparation processes that often impede AI implementations.
Nonetheless, there are certain reasons to be cautious about its near-term prospects. Oracle’s capital spending is rising fast. The company expects to spend around $35 billion on infrastructure in fiscal 2026, approximately 70% higher than $21 billion spent last year. This investment is important for growth, but it may weigh on its free cash flow-generating capabilities in the short term. In the first quarter of fiscal 2026, it generated operating cash flow of $8.1 billion and spent $8.5 billion as capital expenditure, resulting in a negative free cash flow of $362 million.
Additionally, Oracle’s overall financial performance for the first quarter paints a more mixed picture. Despite double-digit revenue growth, non-GAAP EPS increased by a mere 6%. Also, the top line missed the Zacks Consensus Estimate, while the bottom line matched the same.
Oracle Corporation Price, Consensus and EPS Surprise
CRM vs. ORCL: Which Has the Stronger Growth Outlook?
Both companies will benefit from the surging demand for AI-enabled cloud solutions, but Oracle’s growth profile appears stronger in the near term. The Zacks Consensus Estimate for ORCL’s current fiscal-year 2026 revenues and EPS indicates a year-over-year surge of 16.5% and 12.9%, respectively. This growth rate is anticipated to accelerate further in fiscal 2027, with the top and bottom lines forecasted to grow 24.2% and 17.2%, respectively.
By contrast, Salesforce’s fiscal 2026 estimates point to more modest 8.8% revenue growth and a 11.4% EPS increase. For 2026, the top and bottom lines are projected to rise 8.8% and 11.2%, respectively.
While Salesforce’s trajectory is promising, Oracle continues to capture a larger share of the AI-enabled cloud software spend, particularly from enterprises that are investing heavily in generative AI infrastructure.
CRM vs. ORCL: Price Performance & Valuation Check
Year to date, shares of Salesforce have plunged 32.1%, while Oracle has soared 19.3%.
Image Source: Zacks Investment Research
On the valuation front, Salesforce trades at a forward 12-month price-to-earnings (P/E) multiple of 18.33, far below Oracle’s 26.95.
Image Source: Zacks Investment Research
Conclusion: Oracle Has the Edge
Both Salesforce and Oracle are formidable forces in the cloud enterprise software market, but Oracle stands out as the better investment choice today. Oracle’s accelerated growth in AI, deeply unified platform strategy and higher growth outlook offer a more compelling risk-reward profile. Additionally, ORCL’s faster growth profile justifies its premium valuation.
On the contrary, Salesforce’s slowing growth is real and has weighed on its stock price. Nonetheless, its leadership in the customer relationship management software space, focus on AI, strategic acquisitions and reasonable valuations remain some positive aspects.
Considering all the factors, we believe that Oracle has an edge over Salesforce from an investment point of view.
Image: Bigstock
Salesforce vs. Oracle: Which Cloud Software Stock Has the Edge?
Key Takeaways
Salesforce (CRM - Free Report) and Oracle (ORCL - Free Report) are two of the biggest names in the cloud software market. Both companies offer powerful, enterprise-grade platforms spanning customer relationship management, enterprise resource planning, database management and artificial intelligence (AI)-powered cloud solutions.
Both companies have transformed how businesses manage operations, customer relationships and data infrastructure. With the digital transformation wave accelerating, the question remains: Which stock makes a better investment pick today? Let’s break down their fundamentals, growth prospects and market challenges to determine which offers a more compelling investment case.
The Case for Salesforce Stock
Salesforce has long held the top position in the customer relationship management market, according to Gartner. The company’s vision now goes beyond customer management, and it is building a broader ecosystem focused on AI, data and collaboration. Acquisitions like Waii, Bluebirds, Informatica and Slack show Salesforce’s push to evolve into a more complete enterprise platform.
AI is now central to Salesforce’s growth story. Since the 2023 rollout of Einstein GPT, Salesforce has been embedding generative AI across its offerings to help companies automate processes, improve decision-making and strengthen customer relationships.
Its latest innovation, Agentforce, is gaining momentum. Combined with Data Cloud, these AI-driven offerings brought in $1.2 billion in recurring revenues in the second quarter of fiscal 2026, up 120% year over year. More than 40% of Agentforce deals came from existing clients, showing Salesforce’s success in cross-selling AI features to its user base.
Another long-term tailwind is rising global spending on generative AI. Gartner estimates that worldwide generative AI spending will hit $644 billion in 2025, implying a 76.4% year-over-year increase. Enterprise software, a key segment for Salesforce, is expected to grow even faster, with a projected increase of 93.9% to $37.16 billion, per the Gartner report.
On the financial front, Salesforce’s revenue growth has slowed down. However, this is not because of any company-specific issues but due to macroeconomic headwinds. Enterprise customers are tightening their IT budgets due to fears of an escalating tariff war and slowing economic growth. In the first half of fiscal 2026, revenues rose just 8.7% year over year, and non-GAAP earnings per share (EPS) grew by only 9.4%.
Salesforce Inc. Price, Consensus and EPS Surprise
Salesforce Inc. price-consensus-eps-surprise-chart | Salesforce Inc. Quote
The Case for Oracle Stock
Oracle is also becoming more active in the AI space, which is driving its overall financial performance. In the first quarter of fiscal 2026, the company’s revenues soared 12% year over year to $14.9 billion. More significantly, cloud revenues climbed 27% to $7.19 billion, with cloud infrastructure revenues specifically expanding 54% to $3.35 billion. Management provided remarkably ambitious guidance, projecting Oracle Cloud Infrastructure revenues to grow 77% to $18 billion in fiscal 2026, subsequently climbing to $32 billion, $73 billion, $114 billion and ultimately $144 billion over the following four years through fiscal 2030.
This aggressive outlook stems from several multi-billion-dollar contracts signed during the quarter, including partnerships with major technology companies. Over the past few months, Oracle has been awarded significant cloud contracts from major tech companies, including OpenAI, xAi, Meta Platforms, NVIDIA and Advanced Micro Devices.
To build on this momentum, Oracle has been continuously launching new and innovative products. Last month, the company unveiled Oracle AI Database 26ai, featuring native vector search capabilities and deeper interoperability with open standards, including Apache Iceberg and Model Context Protocol. It also unveiled Oracle AI Data Platform, which integrates generative AI models with enterprise data, simplifying the complex data preparation processes that often impede AI implementations.
Nonetheless, there are certain reasons to be cautious about its near-term prospects. Oracle’s capital spending is rising fast. The company expects to spend around $35 billion on infrastructure in fiscal 2026, approximately 70% higher than $21 billion spent last year. This investment is important for growth, but it may weigh on its free cash flow-generating capabilities in the short term. In the first quarter of fiscal 2026, it generated operating cash flow of $8.1 billion and spent $8.5 billion as capital expenditure, resulting in a negative free cash flow of $362 million.
Additionally, Oracle’s overall financial performance for the first quarter paints a more mixed picture. Despite double-digit revenue growth, non-GAAP EPS increased by a mere 6%. Also, the top line missed the Zacks Consensus Estimate, while the bottom line matched the same.
Oracle Corporation Price, Consensus and EPS Surprise
Oracle Corporation price-consensus-eps-surprise-chart | Oracle Corporation Quote
CRM vs. ORCL: Which Has the Stronger Growth Outlook?
Both companies will benefit from the surging demand for AI-enabled cloud solutions, but Oracle’s growth profile appears stronger in the near term. The Zacks Consensus Estimate for ORCL’s current fiscal-year 2026 revenues and EPS indicates a year-over-year surge of 16.5% and 12.9%, respectively. This growth rate is anticipated to accelerate further in fiscal 2027, with the top and bottom lines forecasted to grow 24.2% and 17.2%, respectively.
By contrast, Salesforce’s fiscal 2026 estimates point to more modest 8.8% revenue growth and a 11.4% EPS increase. For 2026, the top and bottom lines are projected to rise 8.8% and 11.2%, respectively.
While Salesforce’s trajectory is promising, Oracle continues to capture a larger share of the AI-enabled cloud software spend, particularly from enterprises that are investing heavily in generative AI infrastructure.
CRM vs. ORCL: Price Performance & Valuation Check
Year to date, shares of Salesforce have plunged 32.1%, while Oracle has soared 19.3%.
Image Source: Zacks Investment Research
On the valuation front, Salesforce trades at a forward 12-month price-to-earnings (P/E) multiple of 18.33, far below Oracle’s 26.95.
Image Source: Zacks Investment Research
Conclusion: Oracle Has the Edge
Both Salesforce and Oracle are formidable forces in the cloud enterprise software market, but Oracle stands out as the better investment choice today. Oracle’s accelerated growth in AI, deeply unified platform strategy and higher growth outlook offer a more compelling risk-reward profile. Additionally, ORCL’s faster growth profile justifies its premium valuation.
On the contrary, Salesforce’s slowing growth is real and has weighed on its stock price. Nonetheless, its leadership in the customer relationship management software space, focus on AI, strategic acquisitions and reasonable valuations remain some positive aspects.
Considering all the factors, we believe that Oracle has an edge over Salesforce from an investment point of view.
Currently, Salesforce and Oracle each carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.