Oracle is 'advantaged.' Analyst explains why.

Shares of Oracle (ORCL) are rising after the company lifted its fiscal 2026 forecast and announced that it expects sales during fiscal 2029 to cross $104 billion.

Wolfe Research managing director and head of software research Alex Zukin joins Morning Brief to break down the company's position in the overall AI race.

"Oracle is advantaged. I think Oracle is really good at building enterprise-class infrastructure. I think they've been doing it for decades. On the software side, I think the Oracle database supports some of the most mission-critical hardened workloads in the world. I think that over time, both the database and the application portfolio customers are going to have to migrate, at least probably the majority of those workloads, over to the cloud to take advantage of some of these innovations that we've been speaking about around generative AI," he tells Yahoo Finance.

He adds that the company has built an ecosystem with other hyperscalers that allows customers to easily move their workloads to the cloud, and points to its partnership with Amazon Web Services (AWS) as an example. He explains that Oracle has "a lot of irons in the fire across the entire ecosystem," which it is able to translate into accelerating growth and improving profitability.

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This post was written by Melanie Riehl

Video Transcript

Yeah, like Oracle is advantaged.

I think Oracle is really good at building uh enterprise class infrastructure.

I think they've been doing it for decades.

On the software side, I think the Oracle Database is, you know, support some of the most mission critical hardened workloads in the world.

Uh I think that over time, both the database and the application portfolio, customers are going to have to migrate at least probably the majority of those workloads over to the cloud to take it advantage of some of these innovations that we've been speaking about around generative A I and I think Oracle has done a really good job of building an ecosystem with the other hyper scalers making it easier for customers to say yes to moving those on prem workloads into the cloud on any hyper scalar that they chose.

I think it was a huge deal for Oracle to talk about Aws as a new partner for them.

That's been, you know, something that not a lot of us expected uh a year ago, even after the Microsoft relationship.

And I think they've, they've just, they've got a lot of irons in the fire uh across the entire ecosystem and kind of similar to Microsoft advantages in one part of the stack, start to diffuse into other parts of the stack.

And for oracle again, not that dissimilar from Adobe, what that's translating to is accelerating growth uh with improving profitability, Alex.

What do you think?

Uh two quick ones here, the financial impact from the deal with Aws and then moving on, what do you think this then signals about the potential for future partnerships here with other larger players within the space?

So I think that the Aws uh partnership is a big deal, I think mostly because customers uh that are Aws, customers are now going to be able to use funds that are allocated uh to uh their, you know, hyper scalar bills on workloads that are on Oracle.

Uh I think that's a big deal.

I think the fact that it's now fully multi cloud means meaning that this same service is available on Aws on Azure on GCP, gives customers again more faith uh that they can choose Oracle and know that no matter what future relationships they create with their hyperscale partners, at least that relationship is very stable and therefore, is predictable and scalable.

I think in terms of other partnerships, you know, look, I, I don't know what, what, who else is left quite frankly on the hyper scale side.

Uh I'm sure that there are probably interesting application partnerships uh that they could strike and, and a I partnerships that they could strike with, with some of the, you know, emerging foundation model vendors.

But uh I, you know, I don't know if that's in the cards in the short term.

We will see Alex Zukin managing director and head of software at Wolf Research.

Alex, thanks so much for taking the time here with us on this Friday.