Latest news with #Exadata
Globe and Mail
21-07-2025
- Business
- Globe and Mail
Will Broad Cloud Access Boost Momentum for Oracle's Hardware Business?
Oracle ORCL is leveraging its partnerships with top cloud providers to accelerate the momentum of its hardware business. By integrating Exadata X11M systems and Autonomous Database infrastructure into data centers operated by Amazon Web Services (AWS), Microsoft Azure and Google Cloud, the company's multicloud strategy enables enterprises to access its high-performance database services within their preferred ecosystems. This approach reduces dependency on Oracle's own cloud while significantly expanding its hardware reach across global markets. Recent initiatives highlight this expansion. Oracle Database@Google Cloud launched in Japan, offering Exadata-powered services through Google's data centers, while Oracle Database@AWS allows seamless database workload migration to AWS' scalable infrastructure. These moves are expected to boost the hardware segment's top-line growth through the sale and installation of Exadata systems, storage servers and database machines, along with hardware costs capitalized and recovered over time via cloud subscriptions. To further meet rising demand, Oracle is aligning its hardware with AI growth by integrating Nvidia's latest GPUs and committing more than $40 billion to procure 400,000 Nvidia GB200 chips for its Stargate AI data center in Texas. Planned investments of $2 billion in Germany and $1 billion in the Netherlands underscore its commitment to scaling high-performance infrastructure through advanced hardware solutions. Oracle's hardware revenues are projected to reach $3 billion in fiscal 2026, following a 6.82% year-over-year increase in fourth-quarter fiscal 2025, highlighting the strength of its partnership-led growth model. Oracle Faces Tough Competition in Hardware Space Oracle faces stiff competition in advanced Hardware solutions from players like Hewlett-Packard HPE and Dell Technologies DELL. Hewlett-Packard offers powerful hardware solutions that support advanced computing, storage and networking facilities along with AI workloads. Hewlett-Packard's ProLiant Gen11 servers, featuring AMD EPYC Genoa chips and liquid-cooled GB200 NVL72 racks, target demanding AI workloads. With innovations like the XD690 housing eight NVIDIA GPUs, Hewlett-Packard delivers hybrid-cloud, energy-efficient hardware that rivals Oracle's Exadata in modern enterprise environments. Dell Technologies offers PowerEdge servers and PowerStore/PowerMax storage as flexible alternatives to Oracle's Exadata. While Exadata can deliver up to 36× higher I/O performance, Dell Technologies drives appeal through its VxRail hyper-converged systems, offering flexibility and cost savings. A major power company switched from Exadata to Dell Technologies' VxRail, reducing Oracle licensing exposure and saving over $5 million in total project costs. ORCL's Price Performance, Valuation & Estimates Shares of Oracle have appreciated 47.3% year to date, underperforming both the Zacks Computer and Technology sector's return of 9.5% and the Zacks Computer - Software industry's appreciation of 19.2%. ORCL's YTD Price Performance From a valuation standpoint, ORCL appears overvalued, trading at a trailing 12-month EV/EBITDA multiple of 30.15x, significantly higher than the Zacks industry's average of 20.55x. Oracle carries a Value Score of F. ORCL's Valuation The Zacks Consensus Estimate for ORCL's fiscal 2026 revenues is pegged at $66.57 billion, indicating 15.97% year-over-year growth. The consensus mark for ORCL's 2026 earnings is pegged at $6.73 per share, increased by a couple of cents over the past 30 days. The earnings figure suggests 11.61% growth over the figure reported in fiscal 2025. ORCL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. One Big Gain, Every Trading Day To help you take full advantage of this market, you're invited to access every stock recommendation in all our private portfolios - for just $1. Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That's about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%. Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles. See Stocks Now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dell Technologies Inc. (DELL): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report
Yahoo
09-07-2025
- Business
- Yahoo
Oracle's Cloud Expansion via AWS: 3 Key Reasons to Hold the Stock Now
Oracle Corporation ORCL reached a critical inflection point with its Oracle Database@AWS launch, completing partnerships across all major hyperscalers, including Amazon AMZN, and positioning the company as a crucial bridge between traditional enterprise computing and AI-driven cloud infrastructure. The stock has surged 43% year to date, reflecting strong execution of its cloud transformation strategy, while trading at a 17.7x forward P/E despite elevated growth fourth-quarter 2025 results validated this transformation thesis, with total revenues of $15.9 billion (up 11% YoY) and cloud infrastructure revenue growth accelerating to 52%. The company's raised fiscal 2026 guidance projects more than $67 billion in revenues (16% growth) and expects cloud infrastructure growth to exceed 70%. Oracle's $138 billion remaining performance obligations (RPO) backlog provides unprecedented revenue visibility, while a $30 billion annual cloud deal with OpenAI starting fiscal 2028 represents a potential game-changer for the Zacks Consensus Estimate for fiscal 2026 revenues is currently pegged at $66.55 billion, suggesting growth of 15.94% from the year-ago quarter's reported figure. The consensus mark for fiscal 2026 earnings is pegged at $6.71 per share, up 1.1% over the past 30 days. Oracle Corporation price-consensus-chart | Oracle Corporation Quote Find the latest earnings estimates and surprises on Zacks Earnings Calendar. The Oracle Database@AWS launch represents more than a technical integration — it's a strategic completion of Oracle's "infrastructure anywhere" vision. Unlike simple cloud interconnections, Oracle deploys its cloud infrastructure physically within AWS data centers, providing customers with native Oracle database services, including Autonomous Database and Exadata, while maintaining seamless integration with AWS services like Amazon Redshift and differentiators include zero-ETL integration capabilities, Oracle Database 23ai with AI Vector Search, and the ability to use existing AWS commitments through the AWS Marketplace. Early enterprise adopters, including Fidelity Investments, Nationwide, and SAS, have highlighted the elimination of previous friction points that kept Oracle workloads off AWS partnership completes Oracle's coverage across all major cloud providers like AWS, Microsoft MSFT Azure, Alphabet GOOGL-owned Google Cloud, addressing the reality that 98% of enterprises use or plan to use multiple cloud providers. The database multicloud revenue surge of 115% quarter over quarter in fourth-quarter 2025 demonstrates strong customer demand for this flexibility. Oracle's fourth-quarter 2025 performance exceeded Wall Street expectations across key metrics, with cloud services revenues of $6.7 billion (up 27% YoY) driving overall growth. Cloud infrastructure revenues reached $3.0 billion with 52% growth, while the broader cloud business approaches a $12 billion annual run rate. Operating margins remain healthy at 44%, though near-term pressure is expected as the company scales its infrastructure company's ambitious fiscal 2026 guidance reflects confidence in demand acceleration. Management projects cloud infrastructure growth exceeding 70% in fiscal 2026, up from 50% in fiscal 2025, while total cloud growth should exceed 40%. RPO growth is expected to surpass 100%, indicating strong customer commitment to Oracle's cloud expenditure is expected to exceed $25 billion in fiscal 2026, representing Oracle's largest infrastructure investment cycle. While this creates near-term free cash flow pressure, the company's $138 billion RPO backlog provides strong visibility into returns on these investments. Oracle's strategic pivot toward AI infrastructure has positioned the company as a critical enabler of enterprise AI adoption. The $30 billion annual cloud deal with OpenAI through the Stargate project represents validation of Oracle's AI infrastructure capabilities, while partnerships with Meta, NVIDIA, and other AI leaders demonstrate broadening enterprise Database 23ai introduces more than 300 new AI-focused features, including native vector search capabilities that eliminate the need for separate vector databases. This converged approach allows customers to run AI workloads directly alongside traditional database operations, reducing complexity and maintaining Oracle's database-centric competitive company's infrastructure expansion includes 47 new data centers under construction, with customers already requesting all available cloud capacity. Oracle's unique positioning in providing AI infrastructure while maintaining enterprise-grade database capabilities differentiates it from pure-play cloud providers. Oracle trades at a three-year EV/EBITDA multiple of 28.93x, substantially above the Zacks Computer-Software industry average of 20.12x, indicating premium valuation expectations. The company's transformation success depends on flawless execution of its massive infrastructure investment cycle, while competitive pressure from AWS, Microsoft Azure, and Google Cloud remains intense. Image Source: Zacks Investment Research Shares of Oracle have gained 40.4% so far this year, outperforming the Zacks Computer and Technology sector's growth of 7%. Shares of Microsoft and Amazon have returned 19.6% and 1.6% year to date, while Google shares have lost 5.4%, respectively. Image Source: Zacks Investment Research Oracle presents a compelling long-term investment opportunity for investors seeking exposure to AI infrastructure and enterprise cloud transformation. For existing holders, maintaining positions makes sense given Oracle's successful execution and improving competitive positioning. New investors should consider accumulating shares during market volatility, particularly if economic concerns create temporary weakness in technology valuations. Oracle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Oracle Corporation (ORCL) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
