At Nvidia's (NVDA 3.65%) latest technology conference in March, the company highlighted more ways it's supercharging the cloud computing industry. Even Oracle (ORCL 0.49%) is getting in on the action as it harnesses Nvidia's power to score some victories against its far larger incumbent rivals in the cloud infrastructure industry. 

Old tech giant Oracle is breathing some new life into its sprawling enterprise thanks to the cloud and Nvidia, but does that make the stock a buy?

Nvidia chooses Oracle as "first provider" of a new cloud service

During Nvidia's March conference, it was announced that Oracle Cloud Infrastructure (OCI) would be the first public cloud-computing service to offer the new Nvidia DGX Cloud service. The new service offers the ability to "rent" Nvidia's newest hardware systems via a cloud subscription without making a sizable purchase of the hardware directly. DGX Cloud is powerful and able to train advanced artificial intelligence (AI) systems.  

This isn't so surprising. Last autumn, Oracle and Nvidia initially announced that OCI was going to be adding tens of thousands of advanced Nvidia GPUs to try to attract new customers. It's been working.  

Oracle has been revitalizing its growth via its OCI segment. Cloud infrastructure revenue was up 55% year over year in the fourth quarter of 2022 to $1.2 billion. This is small potatoes compared to the cloud giants: Amazon's AWS, Microsoft Azure, and Alphabet's Google Cloud. But OCI has its eye on playing catch-up and succeeding with its fast cloud expansion. Overall revenue jumped 18% year over year in the fourth quarter as a result of the company's OCI and related software segments.  

Adding Nvidia DGX Cloud to the mix could help Oracle keep the pedal to the metal in the age of AI. 

Time to get excited about Oracle?

When Nvidia and Oracle first struck the new infrastructure deal last autumn, I posited that the former would be the biggest winner from its new leadership in cloud technology. Indeed, though Oracle struck a deal first, it certainly wasn't the last to do so. Microsoft Azure has also been buying GPUs en masse. AWS was quiet for a while, but it also announced at the March conference that it was launching new Nvidia GPUs. 

With Nvidia currently a dominant leader in chip hardware -- especially when it comes to powering AI services -- it seems that the semiconductor pioneer has leveled the playing field for cloud infrastructure providers.

If one upstart as insignificant as OCI can start scoring big victories simply by adding Nvidia to the mix, cloud infrastructure might actually be getting turned into a commodity service. If one buys Nvidia chips, they all need to follow suit.

For now, commoditization of cloud infrastructure is great news for Oracle OCI. It means it can compete and win business, by being the first to strike with Nvidia services, and perhaps later on by being able to compete on pricing -- assuming it can keep scaling up its cloud platform.

Oracle stock currently trades for 30 times trailing-12-month earnings per share, or 18 times expected earnings one year forward. It might not be a fantastic deal, but it isn't a ludicrous one, either, with Oracle back in actual growth mode again.  

Be wary of chasing recent winners

Of course, over the long term, it looks like Nvidia will still be the biggest winner here. Its work on advanced computing is what has leveled the cloud playing field, which means a big chunk of future profitable growth will accrue to Nvidia. But the market has already caught on to this fact, and Nvidia fetches a wild premium valuation these days (over 60 times expected earnings one year forward as of this writing).  

For investors looking for a more reasonably priced stock benefiting from the emergence of new AI and cloud technology, Oracle might be worth a look alongside its bigger tech peers. But be wary of chasing recent winners. The other public cloud infrastructure titans are responding and leveraging Nvidia's new hardware, too.

My biggest long-term bet remains Nvidia, though I'm not buying any more at the moment given the big run-up in share price in recent months.