Software giants Microsoft (MSFT +1.07%) and Oracle (ORCL 0.34%) are also major players in the era of artificial intelligence (AI). Both companies are aggressively building toward an AI-native future and showing great success in their efforts, but which stock will reward its investors more?
NASDAQ: MSFT
Key Data Points
Oracle is making investors nervous
Oracle stumbled at the end of 2025 as investors began to question its ability to open more server farms for its partner, OpenAI, and reported less-than-impressive quarterly revenue and free cash flow. Oracle's debt load is growing, and the company has been slow in converting its large backlog.
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Oracle's stock price is up over 17% in the past 12 months. The stock trades at a forward price-to-earnings ratio of around 30, which is slightly lower than Microsoft's forward P/E of just over 30. Microsoft's earnings per share are also almost three times those of Oracle.
NYSE: ORCL
Key Data Points
Oracle's contracted backlog is impressive, at $523 billion; this is revenue that will eventually come to fruition. So much of Oracle's success, though, is tied to OpenAI. This is also a significant risk for investors. If it all goes right, the bets that Oracle is making now could pay off massively for investors.
Microsoft remains reliable
Microsoft looks to be the more predictable and stable investment in the new AI era. The company is already a leader in the space as well as in cloud services, productivity, and gaming. Microsoft can leverage its existing infrastructure to remain relevant and grow over the next several years.
As of its most recent quarterly earnings, Microsoft reported double-digit growth in nearly all of its business channels, including a 40% year-over-year increase in Azure and other cloud services revenue.
Both stocks could potentially make an investor rich, but the execution risks within Oracle's strategy make Microsoft the more likely winner in a share-price-growing competition.
