Oracle Beats IBM as Cloud Pick After 40% Slide and 47% Revenue Surge
Updated
Updated · The Motley Fool · Jul 13
Oracle Beats IBM as Cloud Pick After 40% Slide and 47% Revenue Surge
3 articles · Updated · The Motley Fool · Jul 13
Summary
Oracle emerges as the stronger cloud-computing investment after a 40% stock drop, with its latest quarter showing 47% cloud revenue growth versus IBM’s 13% cloud increase.
Oracle’s case rests on faster expansion and cheaper valuation: it trades at 25 times earnings against IBM’s 26, while fiscal 2027 guidance implies 28% revenue growth at the midpoint.
IBM’s AI-linked strengths are more diversified but smaller in impact—IBM Z revenue jumped 51%, yet Infrastructure brought in $3.3 billion and accounted for only a little over 20% of total sales.
Oracle’s main risk is concentration around OpenAI: a five-year deal worth more than $300 billion starting in 2027 makes up nearly half of its $638 billion remaining performance obligations.
For investors choosing one stock, the report argues Oracle’s selloff now looks overdone, while IBM appears steadier but less compelling as a pure cloud growth play.