Oracle Corporation ORCL has lately emerged as the most sought-after stock following its multi-billion-dollar contracts with prominent artificial intelligence (AI) companies. Led by Larry Ellison, Oracle expects revenues to surge in the coming years, with its stock up 90% this year, outperforming the Wall Street darling NVIDIA Corporation’s NVDA 48.7% gain. Does this mean Oracle is a better buy than NVIDIA now? Let’s analyze –
Oracle’s fiscal 2026 first-quarter net income was essentially unchanged from the year-ago levels, but its revenues of $14.9 billion were up 11% year over year. However, what stands out is Oracle’s incredible backlog. In the fiscal first quarter, Oracle’s remaining performance obligation (RPO) soared to $455 million, up 359% year over year. In comparison, Oracle’s RPO was $138 billion in the last quarter.
The significant rise in RPO was driven by Oracle securing quite a few multi-year deals at once. In fact, the company, with the help of three separate customers, signed four multi-billion-dollar contracts in the quarter ending Aug. 31. One of the deals is with OpenAI to develop 4.5 gigawatts of data center capacity in the United States, which is part of the Stargate project.
In the reported quarter, Oracle’s infrastructure-as-a-service (IaaS) and cloud revenues rose 55% and 28%, respectively. Most importantly, the massive backlog of cloud deals is expected to boost Oracle’s cloud infrastructure revenues in the near future.
Management expects Oracle Cloud Infrastructure (OCI) revenues to jump 77% to $18 billion in fiscal 2026. OCI revenues are further expected to scale to $32 billion, $73 billion, $114 billion and $144 billion in fiscal 2027, fiscal 2028, fiscal 2029 and fiscal 2030, respectively. The good thing is that these revenues are already secured through existing contracts, so any new deal will push Oracle’s growth targets even further.
Yet again, NVIDIA has posted a commendable performance in its recently reported quarter and provided encouraging guidance. NVIDIA’s growth is predominantly driven by its data center operations that focus on its graphics processing units (GPUs). The division saw revenues increase by 56% year over year to $41.1 billion in the fiscal second quarter. Sales of NVIDIA’s coveted Blackwell chips jumped 17% from the fiscal first quarter as major cloud providers continue to purchase the advanced processor.
On an annual basis, NVIDIA’s robotics and gaming divisions also saw a jump in sales, with total revenues for the company jumping 56% from $30.04 billion a year ago. By the way, NVIDIA didn’t sell any H20 chips to China during the quarter, but was able to generate $180 million by selling those chips to a customer outside China. In effect, tariff woes had little impact on NVIDIA’s business.
Story Continues
