Cloud Firm Poised as Surprising Frontrunner in AI Upheaval?
Oracle, the veteran tech company established in the late 1970s, is making a surprising move in the AI revolution. With its significant and accelerating growth in the artificial intelligence market, Oracle is poised to challenge the dominance of tech giants like AWS and Microsoft.
The company's AI infrastructure business is expanding at a rapid pace. In Q2 2025, Oracle witnessed a 336% increase in GPU consumption, a clear indication of surging AI workloads from key enterprise clients in sectors such as pharmaceuticals and finance. This growth is driven by the development of Project Stargate, an AI supercomputer powered by Oracle's own Graviton chips, aiming to deploy 10,000 GPUs by the end of 2025, targeting a $22 billion AI infrastructure market.
Oracle's financial momentum is also strong. In Q4 2025, its Infrastructure-as-a-Service (IaaS) revenue grew 27% year-over-year, with a projected 70% growth in FY2026 fueled by AI adoption. This growth is further supported by a surge in Oracle's Remaining Performance Obligations (RPO), which have soared 41% YoY to $138 billion, with expectations to double to $276 billion by mid-2026.
Oracle's competitive edge lies in its focus on cost efficiency and specialized AI use cases. By leveraging a vertically integrated technology stack, Oracle reduces the total cost of ownership by 30-40% for enterprises using both ERP and AI infrastructure, setting it apart from broad AI service providers. Oracle targets niche, high-value AI applications such as cancer diagnostics, agricultural yield prediction, and real-time fraud detection—areas with strong demand in regulated industries like healthcare and finance.
Oracle's success is also attributed to its strong enterprise trust, especially among regulated industries that prefer the company's integrated, controlled environment over the more open ecosystems of hyperscalers like AWS and Microsoft. This trust supports sticky customer relationships, reflected in a 20% growth in its SaaS segment, including its flagship NetSuite ERP.
Oracle's stock has reflected this growth. It has tripled since early 2023 and risen 43% year-to-date in 2025, outpacing broader markets due to the AI boom and cloud infrastructure demand. Furthermore, Oracle has been recognized as a leader in AI-powered analytics platforms by IDC MarketScape in 2025, underscoring its growing prominence in BI and AI analytics.
The strength of AI demand and the AI market growth forecast imply the momentum should continue for quite some time. Leading tech companies, such as Nvidia, Meta Platforms, Alphabet, and Palantir, have spoken of strong demand and multi-billion-dollar AI spending plans. Oracle's multicloud service, which allows users to use services from various cloud providers together, further positions it to capitalise on this demand.
Moreover, Oracle offers a full portfolio of AI-driven cloud applications for various purposes, such as supply chain management and customer relations. The company also provides a service called Oracle Alloy, allowing customers to operate their own clouds for their customers.
As the AI revolution continues, Oracle, with its strategic focus and execution, could indeed become a surprise winner against larger competitors. Its strong financial backlog, expanding AI infrastructure, focus on specialized AI verticals, and enterprise trust provide a solid foundation for its growth. The current valuation of Oracle, reasonable for a growth stock, suggests that investors may want to keep a close eye on this tech giant.
Investing in Oracle, a tech company renowned for its AI supercomputer Project Stargate, might be a smart move for those interested in the AI revolution, given its significant growth in the GPU consumption and AI infrastructure market. The company's financial health is robust, with a projected 70% growth in FY2026 fueled by AI adoption, and a strong enterprise trust that supports sticky customer relationships in heavily regulated sectors such as healthcare and finance.
