The Motley Foolยท2025-09-11 07:30Core Insights - Oracle is positioned as a more stable investment in AI exposure compared to Nvidia, primarily due to its contract-based revenue model and significant backlog of signed contracts [1][10][11] Company Performance - Oracle's remaining performance obligations (RPO) surged to $455 billion in the quarter ended August 31, reflecting a 359% year-over-year increase, with expectations to exceed half a trillion dollars soon [4][5] - The cloud revenue for Oracle rose by 28%, while infrastructure-as-a-service (IaaS) revenue increased by 55% [4] - Oracle's CEO projected a 77% growth in Oracle Cloud Infrastructure (OCI) revenue to $18 billion for the fiscal year, with ambitious future targets of $32 billion, $73 billion, $114 billion, and $144 billion over the next four years [6] Market Dynamics - Oracle's growth is increasingly anchored by multiyear contracts, providing a clearer revenue visibility compared to Nvidia's hardware-dependent revenue model, which is subject to cyclical fluctuations [2][10] - Nvidia reported a 56% year-over-year revenue increase to $46.7 billion, with data-center revenue also up 56% to $41.1 billion, but its revenue is more volatile due to product transitions and customer ordering patterns [8][9] Strategic Outlook - Oracle's multicloud momentum is highlighted by a staggering 1,529% growth in multi-cloud database revenue from major platforms like Amazon, Google, and Microsoft [6] - The company declared a quarterly dividend of $0.50, indicating strong cash generation and confidence in its financial health [7] - The contrasting growth models of Oracle and Nvidia suggest that Oracle offers a more stable investment opportunity with less volatility tied to hardware cycles [10][11]