Oracle stock has been picking up momentum…
Oracle (ORCL -1.23%) isn’t the biggest cloud services provider around, but it’s one of the fastest-growing right now — and the company, once most known for database management, is going all-in on developing its cloud presence and serving artificial intelligence (AI) customers. The efforts are working, with demand and cloud infrastructure revenue soaring in recent times.
In fact, in Oracle’s quarterly report this week, the company announced a 42% increase in cloud infrastructure revenue to $2 billion. And Oracle even forecast full-year revenue growth in the double digits based on current AI demand. The company is showing it is attracting customers — it even signed its biggest contracts ever in the past two quarters — and can compete with larger cloud services providers. On top of this, Oracle shared news that could be massive for the company and for shareholders. Let’s check it out.
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Oracle’s focus on cloud infrastructure
As mentioned, Oracle is putting the focus on expanding and strengthening its cloud infrastructure offerings and serving AI customers. This helped the company sign its largest sales contracts ever in the most recent quarter from customers aiming to train large language models. In the quarter, Oracle signed about 30 AI contracts worth more than $12 billion.
This demand is pushing Oracle’s remaining performance obligation (RPO), or the revenue expected from contracted services, higher — in the quarter, RPO advanced 44% to $98 billion. And the company says this momentum should continue, offering us reason to be optimistic about revenue in the upcoming quarters.
Now, let’s move along to the huge news that should reinforce our optimism. Oracle announced two significant AI deals, involving market giants, a sign Oracle has joined the ranks of today’s leading AI companies. OpenAI, the developer of popular chatbot ChatGPT, will run deep learning and AI workloads on Oracle Cloud infrastructure. And Alphabet‘s Google signed a multi-cloud partnership with Oracle, making it easy for customers to deploy projects across both clouds. As part of the deal, Oracle will offer “Oracle Database at Google Cloud” as of September.
These two agreements in particular should help Oracle stand out and carve out market share in the high-growth area of AI. The company’s progress gaining contracts has been promising, and these deals could reinforce that momentum.
A leader in “multi-cloud” partnerships
Oracle may be a smaller cloud player than rivals, but the company offers advantages that are being recognized. The Google deal represents another multi-cloud partnership, following an earlier agreement with Microsoft, and these agreements offer customers flexibility — a big plus. And the flexibility doesn’t end here. Oracle also offers other solutions like sovereign cloud and even Oracle Alloy, which allows customers to run their own Oracle-based cloud. Oracle also is known for its competitive pricing, generally lower than rivals’, another positive point for winning contracts.
So, along with Oracle’s advantages and the revenue gains its cloud business has made in recent times, these agreements with OpenAI and Alphabet represent more good news for the company and its investors. This translated into a more than 13% increase for the stock in one trading session after Oracle announced the agreements — and the shares reached a record high.
Of course, this is just a short-term stock move, but it isn’t out of the blue — Oracle stock already has picked up momentum, gaining 20% over the past year. And if Oracle continues to generate revenue growth, expand its capacity, and work with other major cloud providers, the stock could keep on winning.
Is it too late to get in on the Oracle AI growth story? Not at all. The stock trades for only 22 times forward earnings estimates, an absolute steal considering all of the points I mentioned above. So, right now, you can buy this tech player for a song and cheer about the massive news Oracle recently delivered — news that could equal long-term growth for earnings and the stock price.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Oracle. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.