Demonstrating Three Key Points for "Ten Titans" to Validate Their Growth Potential on September 9th
Oracle, the tech giant known for its enterprise software, has found a unique way to capitalise on the burgeoning cloud computing market. Through its Oracle Cloud Infrastructure (OCI), Oracle has tapped into a new revenue stream from its existing enterprise clients, shifting its investment thesis towards AI and cloud technologies.
The success of OCI is evident in Oracle's financial results. The company's total cloud growth for the full fiscal year 2025 was a robust 24%, a significant leap from previous years. This growth is expected to accelerate even further in fiscal 2026, with Oracle predicting a "dramatic" increase, propelling cloud growth to 40%.
The market has taken notice of Oracle's cloud-focused strategy, reflected in the premium valuation of its stock. Currently trading at $238.68, Oracle's stock has seen a remarkable increase of more than 300% since the start of 2020.
However, it's worth noting that Oracle's net long-term debt and capex to revenue are on the rise. This trend, while not uncommon for tech companies undergoing significant expansion, is something investors should keep an eye on.
Oracle's financial results for the quarter ending August 31, 2025, revealed an earnings per share (EPS) of 1.01 USD and a revenue of 14.93 billion USD. This represents a 12.17% increase from the previous year.
In Q4 fiscal 2025, cloud revenue made up 42.1% of total revenue for Oracle, underscoring the importance of its cloud strategy.
Before the advent of OCI, Oracle relied on third-party cloud providers. The shift towards self-owned infrastructure has been a key factor in Oracle's growth. The increase in cloud infrastructure, largely due to OCI, is expected to lead to a staggering 70% increase in cloud infrastructure.
Despite Oracle's impressive growth, the Motley Fool's Stock Advisor analyst team did not include Oracle in their list of the 10 best stocks for investors to buy now. However, it's worth mentioning that the total average return of Stock Advisor is 1,052%, a market-crushing outperformance compared to 185% for the S&P 500.
Oracle's competitive pricing model is another advantage, offering attractive deals to potential clients. The stock symbol for Oracle is NYSE: ORCL. As of today, Oracle's stock has changed by 2.53%.
Analyst consensus estimates reflect an optimistic outlook, calling for $6.78 in fiscal 2026 earnings per share (EPS) and 20% earnings growth in fiscal 2027 of $8.14 in EPS.
Investors looking to capitalise on Oracle's cloud-focused growth may find the company an attractive prospect, but as with any investment, it's essential to conduct thorough research and consider all factors before making a decision.
