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NVIDIA vs. Oracle: Which AI Stock Is the Better Buy After Earnings?
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Key Takeaways
NVIDIA's Data Center revenues surged 117%, while total fiscal Q2 revenues jumped 106% year over year.
Oracle's IaaS revenues rose 121%, with $664B in remaining obligations supporting future growth visibility.
NVIDIA's 97.5% ROE and 14.1% debt-to-equity ratio surpass Oracle's 70.2% and 175.2%, respectively.
Both NVIDIA Corporation (NVDA - Free Report) and Oracle Corporation (ORCL - Free Report) have benefited from the artificial intelligence (AI) boom, with strong demand for AI infrastructure and cloud driving their latest earnings results. But which AI stock looks like a better buy now? Let’s explore –
NVIDIA’s Strong Earnings Cement Its AI Leadership
NVIDIA’s revenues reached $96.2 billion in the fiscal second quarter of 2027, representing a 106% year-over-year increase and an 18% rise sequentially, according to the company’s Aug. 26 press release. The Data Center segment remained NVIDIA’s primary growth driver. Data Center revenues came in at $89 billion, up 117% year over year and 18% from the previous quarter.
NVIDIA also maintained strong profitability alongside rapid revenue growth. During the quarter, the company’s GAAP and non-GAAP gross margins both stood at 75%, up from 72.5% a year ago. The company continues to convert strong revenue growth into even stronger earnings growth, helped by ongoing gains in operating income.
Looking ahead, NVIDIA expects revenues to reach approximately $108 billion, plus or minus 2%, in the fiscal third quarter of 2027, representing 12% sequential growth from the midpoint. With NVIDIA’s growth momentum remaining strong, and the advanced Vera Rubin platform already in full production, the company is well-positioned to capitalize on the next wave of AI infrastructure spending.
Oracle Delivers Exceptional Growth on Cloud and AI Demand
Given its size, Oracle’s revenue growth has been impressive, reaching $19.3 billion in the fiscal first quarter of 2027, up 30% year over year, driven by ongoing customer migration to cloud-based solutions, according to the company’s Sept. 10 press release.
Oracle’s Cloud Infrastructure (IaaS) revenues reached $7.4 billion, up 121% year over year, while Cloud Applications revenues rose 10% to $4.2 billion. The expanding IaaS business positions Oracle to benefit from the increasing demand for AI infrastructure, while the company gets a stable recurring-revenue base through SaaS.
Oracle further expects revenues to grow 30-34% in the fiscal second quarter of 2027 and reach at least $90 billion for the full year. Additionally, the company’s $664 billion in remaining performance obligations, up $209 billion from the previous year, provides strong visibility into future growth. At the same time, Oracle’s rapid growth is accompanied by an increase in profitability. The company’s non-GAAP operating income rose 31% to $8.2 billion in the fiscal first quarter.
NVIDIA vs. Oracle: One AI Stock Looks Like a Better Buy Now
Explosive Data Center growth, strong margins, and a robust outlook reinforce NVIDIA’s position as a top beneficiary of the continuing AI infrastructure boom. Similarly, strong cloud and AI demand is driving Oracle’s growth, while its growing backlog and improving profitability support a positive outlook.
However, Oracle’s heavy capital spending to expand its Cloud Infrastructure business led to negative free cash flow of $5 billion in the first fiscal quarter and increased financial pressure on the company. Anyhow, Oracle’s debt-to-equity ratio of 175.2% is significantly higher than NVIDIA’s 14.1%, suggesting greater financial leverage and possibly greater downside risk during economic downturns.
Image Source: Zacks Investment Research
Moreover, NVIDIA appears more efficient at generating profits from shareholders’ equity than Oracle. This is because NVIDIA’s return on equity (ROE) of 97.5% exceeds Oracle’s ROE of 70.2%.
Image Source: Zacks Investment Research
Therefore, NVIDIA appears to be the better buy following earnings than Oracle, with lower financial leverage and higher profitability supporting a more favorable outlook. NVIDIA currently has a Zacks Rank #1 (Strong Buy), while Oracle has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.
View the Zacks #1 Rank List
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NVIDIA vs. Oracle: Which AI Stock Is the Better Buy After Earnings?
Key Takeaways
Both NVIDIA Corporation (NVDA - Free Report) and Oracle Corporation (ORCL - Free Report) have benefited from the artificial intelligence (AI) boom, with strong demand for AI infrastructure and cloud driving their latest earnings results. But which AI stock looks like a better buy now? Let’s explore –
NVIDIA’s Strong Earnings Cement Its AI Leadership
NVIDIA’s revenues reached $96.2 billion in the fiscal second quarter of 2027, representing a 106% year-over-year increase and an 18% rise sequentially, according to the company’s Aug. 26 press release. The Data Center segment remained NVIDIA’s primary growth driver. Data Center revenues came in at $89 billion, up 117% year over year and 18% from the previous quarter.
NVIDIA also maintained strong profitability alongside rapid revenue growth. During the quarter, the company’s GAAP and non-GAAP gross margins both stood at 75%, up from 72.5% a year ago. The company continues to convert strong revenue growth into even stronger earnings growth, helped by ongoing gains in operating income.
Looking ahead, NVIDIA expects revenues to reach approximately $108 billion, plus or minus 2%, in the fiscal third quarter of 2027, representing 12% sequential growth from the midpoint. With NVIDIA’s growth momentum remaining strong, and the advanced Vera Rubin platform already in full production, the company is well-positioned to capitalize on the next wave of AI infrastructure spending.
Oracle Delivers Exceptional Growth on Cloud and AI Demand
Given its size, Oracle’s revenue growth has been impressive, reaching $19.3 billion in the fiscal first quarter of 2027, up 30% year over year, driven by ongoing customer migration to cloud-based solutions, according to the company’s Sept. 10 press release.
Oracle’s Cloud Infrastructure (IaaS) revenues reached $7.4 billion, up 121% year over year, while Cloud Applications revenues rose 10% to $4.2 billion. The expanding IaaS business positions Oracle to benefit from the increasing demand for AI infrastructure, while the company gets a stable recurring-revenue base through SaaS.
Oracle further expects revenues to grow 30-34% in the fiscal second quarter of 2027 and reach at least $90 billion for the full year. Additionally, the company’s $664 billion in remaining performance obligations, up $209 billion from the previous year, provides strong visibility into future growth. At the same time, Oracle’s rapid growth is accompanied by an increase in profitability. The company’s non-GAAP operating income rose 31% to $8.2 billion in the fiscal first quarter.
NVIDIA vs. Oracle: One AI Stock Looks Like a Better Buy Now
Explosive Data Center growth, strong margins, and a robust outlook reinforce NVIDIA’s position as a top beneficiary of the continuing AI infrastructure boom. Similarly, strong cloud and AI demand is driving Oracle’s growth, while its growing backlog and improving profitability support a positive outlook.
However, Oracle’s heavy capital spending to expand its Cloud Infrastructure business led to negative free cash flow of $5 billion in the first fiscal quarter and increased financial pressure on the company. Anyhow, Oracle’s debt-to-equity ratio of 175.2% is significantly higher than NVIDIA’s 14.1%, suggesting greater financial leverage and possibly greater downside risk during economic downturns.
Image Source: Zacks Investment Research
Moreover, NVIDIA appears more efficient at generating profits from shareholders’ equity than Oracle. This is because NVIDIA’s return on equity (ROE) of 97.5% exceeds Oracle’s ROE of 70.2%.
Image Source: Zacks Investment Research
Therefore, NVIDIA appears to be the better buy following earnings than Oracle, with lower financial leverage and higher profitability supporting a more favorable outlook. NVIDIA currently has a Zacks Rank #1 (Strong Buy), while Oracle has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.