The Shift from Hype to Fundamentals: Why Quality AI Enablers Outperform in 2026

The artificial intelligence (AI) market is undergoing a profound transformation. In 2026, investors are increasingly prioritizing companies with tangible infrastructure, contracted backlogs, and capital-efficient monetization models over speculative narratives. This shift reflects a broader "Great Rotation" in capital allocation, where markets are demanding proof of profitability and sustainable demand in AI-driven sectors. Two companies-Oracle and Micron-stand out as exemplars of this trend, leveraging their strategic positioning in cloud infrastructure, hardware innovation, and data security to outperform peers.

Oracle: Securing the AI Infrastructure with Contracted Backlogs and Strategic Partnerships

Oracle's Q3 2025 results underscore its role as a critical enabler of AI infrastructure. The company reported $14.1 billion in quarterly revenue, with cloud revenue growing 23% year-over-year to $6.2 billion, driven by a 49% surge in Infrastructure as a Service (IaaS) sales. More importantly, Oracle's Remaining Performance Obligations (RPO)-a measure of contracted future revenue-jumped 62% year-over-year to $130 billion, reflecting robust demand for its cloud services.

A pivotal development for Oracle has been its landmark partnership with TikTok to manage U.S. data security. By positioning itself as a "trusted security partner," Oracle has secured a non-AI revenue stream while aligning with regulatory trends favoring data sovereignty according to market analysis. This deal not only diversifies Oracle's revenue base but also reinforces its ability to monetize large-scale infrastructure projects, a critical factor in a market increasingly skeptical of unproven AI ventures. Analysts suggest that the TikTok partnership could further elevate Oracle's RPO, as the company integrates this workload into its cloud ecosystem.

Micron: Capitalizing on AI-Driven Hardware Demand and Margin Expansion

Micron's performance in 2025-2026 highlights the growing importance of hardware in the AI supercycle. The company reported record Q3 2025 revenue of $9.3 billion, with DRAM revenue accounting for 76% of total sales and growing 51% year-over-year. High-bandwidth memory (HBM) demand, a critical component for AI training, surged 50% sequentially, while data center revenue more than doubled.

Micron's strategic $200 billion investment plan in the U.S.-$150 billion in manufacturing and $50 billion in R&D-further cements its leadership in AI infrastructure. By 2026, the company's fiscal Q1 results revealed $13.64 billion in revenue, driven by sustained HBM demand and a tight supply environment. Management emphasized that AI infrastructure demand remains robust, with Micron's margins expanding significantly compared to peers like Oracle and Broadcom. This margin resilience, coupled with a focus on AI-specific memory and storage solutions, positions Micron to outperform in a market prioritizing hardware efficiency and tangible ROI.

Structural Shifts: From Speculation to Infrastructure and Security

The broader market is recalibrating its approach to AI investment. As noted in a 2026 analysis, the AI supercycle is entering a "digestion" phase, where investors demand clearer profitability and energy-efficient infrastructure. This shift has led to a rotation of capital into small-cap stocks and infrastructure sectors, with the Russell 2000 hitting all-time highs amid renewed interest in traditional industries according to market reports.

For AI enablers like Oracle and Micron, this environment favors companies with contracted backlogs and strong monetization models. Oracle's $130 billion RPO and Micron's $200 billion investment plan represent long-term visibility in demand, insulating them from short-term volatility. Additionally, the growing emphasis on data security-exemplified by Oracle's TikTok deal-highlights a structural trend toward regulated, secure infrastructure, a space where Oracle's expertise gives it a competitive edge.

Why Quality AI Enablers Outperform

In a market increasingly focused on fundamentals, Oracle and Micron demonstrate how capital-efficient infrastructure leaders can thrive. Oracle's ability to secure high-margin cloud contracts and navigate regulatory landscapes, combined with Micron's dominance in AI-critical hardware, positions both as cornerstones of the next phase of AI adoption. As the "Great Rotation" continues, investors are likely to favor companies that deliver measurable value through contracted demand, scalable infrastructure, and strategic differentiation-qualities both Oracle and Micron exemplify.