Nvidia (NVDA 1.06%) and Oracle (ORCL 5.74%) sit near the center of the rush to build modern artificial intelligence (AI) infrastructure, making them good candidates for investors searching for AI winners.
The two businesses, however, attack the trend from different angles. Nvidia designs chips and full AI computing platforms, while Oracle is the longtime enterprise software provider racing to become a major cloud infrastructure provider for AI workloads. For investors choosing between them, Nvidia brings faster growth and higher profitability, while Oracle leans on a massive installed base of customers using its software, as well as a growing cloud computing business.
Image source: Getty Images.
Nvidia's AI momentum
It's difficult to overstate how exciting Nvidia's growth story is. It's staggering. Nvidia's fiscal third-quarter revenue rose 62% year over year to $57.0 billion, up from 56% growth in fiscal Q2. Data center revenue, which includes its AI platforms and represents the bulk of Nvidia's sales, jumped 66% year over year to $51.2 billion as customers ramped up spending on newer Blackwell systems.
During the company's latest earnings call, CEO Jensen Huang argued that Nvidia is benefiting from what he called "three massive platform shifts" occurring simultaneously. The implication is that demand is not tied to a single product cycle but to a broad shift in how computing is done.
NASDAQ: NVDA
Key Data Points
In other words, Huang thinks these are still early days -- quite a statement for a company that already commands a market capitalization of $4.4 trillion.
Additionally, Nvidia's profitability is extraordinary. The company's gross margin for fiscal Q3 was 73.4%, and it continues to convert a large portion of revenue into free cash flow. Free cash flow for the quarter, for instance, was $22.1 billion -- up from $13.5 billion in the year-ago quarter.
Of course, investors have to pay up for this growth story. The stock commands a price-to-earnings ratio of 45 as of this writing.
Oracle's cloud acceleration
Oracle's business is growing much more slowly than Nvidia. However, if the company's remaining performance obligations (RPOs) are an indicator of how things could unfold in the future, this could change.
In Oracle's first quarter of fiscal 2026, total revenue rose 12% year over year to $14.9 billion, with cloud revenue up 28% to $7.2 billion as its cloud infrastructure business gained traction and RPOs piled up.
NYSE: ORCL
Key Data Points
"We signed four multi-billion-dollar contracts with three different customers in Q1," said Oracle CEO Safra Catz in the company's fiscal first-quarter earnings release. "This resulted in RPO contract backlog increasing 359% to $455 billion. It was an astonishing quarter -- and demand for Oracle Cloud Infrastructure continues to build."
Investors have to pay up for this growth story, too. Oracle trades at a similar valuation multiple to Nvidia. As of this writing, its price-to-earnings ratio is 46.
Picking between the two
Both companies give investors direct exposure to AI infrastructure spending, and both stocks look risky at today's valuations. Nvidia, however, appears better positioned because its business is already delivering rapid growth and strong profitability in a leading AI computing franchise. Sure, Oracle offers meaningful upside if its cloud infrastructure strategy continues to gain share. But there's no way to know how fast the company will be able to execute on its demand and how certain it is that the company can convert its RPOs into revenue over time.
For investors who want AI exposure but prefer a relatively safer option within this high-risk corner of the market, Nvidia looks like the more compelling choice. Even so, the stock demands patience and a tolerance for volatility, given how dependent its results are on a handful of large customers. In addition, investors should carefully consider the risks of investing in a company that is at the forefront of an unprecedented computing boom that is extremely difficult to predict.
