Oracle Corporation (ORCL) reported a significant cloud revenue increase of 44% year-over-year, reaching $8.9 billion in Q3 fiscal 2026, while cloud infrastructure revenue soared by 84% to $4.9 billion. In this quarter, total revenues grew by 22%, and remaining performance obligations (RPO) surged 325% to $553 billion. For fiscal 2027, Oracle raised its total revenue guidance to $90 billion. The Zacks Consensus Estimate for Oracle’s fiscal 2026 earnings is projected at $7.45 per share, reflecting a 23.55% growth year-over-year.
Conversely, Alibaba Group Holding (BABA) faced challenges, with total revenues growing only by 2% year-over-year to $40.7 billion in Q3 fiscal 2026, while net income plunged by 66% to $2.2 billion. The company’s free cash flow saw a sharp decline, indicating financial strain amid heavy investments in AI and infrastructure. The Zacks Consensus Estimate for Alibaba’s fiscal 2026 earnings stands at $5.26 per share, implying a 41.62% year-over-year decline.
While Alibaba trades at a forward P/E of 14.87x, Oracle’s higher valuation of 18.18x is considered justified given its better growth metrics. Despite Oracle’s recent 49.5% share price decline, it remains a more favorable investment compared to Alibaba, which faces profitability decline and structural risks.
