Investment in computing infrastructure to support artificial intelligence (AI) is reshaping the cloud computing market, and Oracle (ORCL -0.41%) might be the best cloud stock to bet on. Its focus on offering the greatest customer flexibility and processing speeds for AI applications is driving accelerating growth that could send the stock higher.
Image source: Getty Images.
World-class AI companies are choosing Oracle
Oracle's cloud infrastructure (OCI) segment posted a revenue increase of 55% year over year last quarter, up from 52% in the previous quarter. Oracle signed deals with multiple tech giants, including ChatGPT's OpenAI, sending its remaining performance obligations up 359% year over year to $455 billion.
These results show demand for AI training, inference, and data analytics is accelerating, and Oracle is in pole position. It has become the go-to cloud provider for AI workloads. Oracle's customers can run its cloud services on other platforms from Amazon, Google, and Microsoft, providing the utmost flexibility.
The spike in remaining performance obligations shows Oracle's ability to scale rapidly. Leading AI companies are choosing Oracle to train their AI models due to its ability to build large data centers that are faster and more cost-efficient than any of its competitors.
Analysts expect Oracle's earnings to grow 15% annually in the coming years, but these estimates have been trending up. Management expects its cloud infrastructure business to reach $144 billion in revenue in four years, up from $18 billion this year. This should support more gains for Oracle investors.
