Oracle: The Cloud Stock to Buy According to Analysts?

Oracle Corporation (ORCL) has been making waves in the cloud computing industry, with analysts bullish on its prospects. But is it the best cloud stock to buy? Let's dive into the data and find out.

Oracle's cloud services revenue rose 21% to $5.6 billion in the first quarter of 2025, indicating strong demand for its cloud offerings. This growth is driven by enterprises seeking to leverage cloud infrastructure for scalability, cost savings, and access to advanced technologies like AI. Oracle's cloud infrastructure is powered by Nvidia's hardware, which is widely considered the gold standard for AI semiconductors. This integration allows Oracle to capitalize on the growing demand for AI training-related opportunities, as AI becomes increasingly important for businesses.

Moreover, Oracle has formed partnerships with major cloud service providers like Amazon Web Services and Google Cloud to make it simpler for customers to connect their data across vendors. These partnerships are expected to drive a nice cloud revenue lift and growth acceleration for Oracle. Oracle's total revenue for the first quarter of 2025 was $13.3 billion, up 7% year over year. This growth, coupled with the company's strong financial position, reinforces analysts' confidence in Oracle's cloud computing business.

Oracle's cloud infrastructure, known as Oracle Cloud Infrastructure (OCI), is a key part of the company's cloud transition and is viewed as a less expensive option compared to market leaders like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. In the third quarter of 2024, Oracle won 3% share of the global cloud infrastructure services market, up from 2% in the same period a year ago. This growth is driven by the company's ability to capitalize on AI training-related opportunities and its partnerships with other cloud service providers, such as Amazon Web Services and Alphabet's Google Cloud. Oracle's cloud infrastructure is also powered by Nvidia's hardware, which is widely considered the gold standard for AI semiconductors.



Despite being a smaller player compared to AWS, Microsoft Azure, and Google Cloud, Oracle's cloud infrastructure is seen as a viable alternative for customers looking for a more cost-effective solution. Oracle's cloud growth strategy has been bolstered by strategic partnerships and acquisitions, such as its partnership with Nvidia, partnerships with AWS and Google Cloud, and acquisitions of Sun Microsystems and NetSuite. These partnerships and acquisitions have helped Oracle expand its cloud offerings, attract more customers, and increase its market share in the cloud computing industry.

In conclusion, Oracle's strong cloud revenue growth, strategic partnerships, and acquisitions make it an attractive option for investors looking to capitalize on the growing cloud computing market. While Oracle may not be the largest player in the cloud market, its cost-effective solutions and partnerships with major cloud service providers make it a compelling choice for customers and investors alike. As the cloud market continues to grow, Oracle's cloud computing business is poised to benefit from increased demand for AI and multi-cloud partnerships.