The actions of artificial intelligence (AI) have been some of the best interpreters in Wall Street in recent years. However, like any other sector, they arise in many different forms and sizes.
So let’s review two of the most important and most famous AI actions – Oracle (Orcl 1.61%)) And Amazon (Amzn 0.99%)) – And see what is the best choice for investors right now.
Image source: Getty Images.
Oracle
As the AI revolution has won steam, Oracle’s stock also has. After years behind the best dogs in the technology sector – and the market as a whole – actions have come to life in the past three years.
Indeed, at the time of writing this article, Oracle increased by 79% against 26% for the S&P 500 In the past three years.
The reason for this wave is simple: request from the AI data center. AS one of the main providers of cloud data centers, the company has increased to meet the high computer requirements caused by the growing demand for training, inference and deployment of AI.
Consequently, the growth of the slow income of the company has accelerated. During its last quarter (ending on February 28), total turnover jumped from 6% from one year to another to $ 14.1 billion, led by 10% growth in its cloud services.
Although this growth in income by 6% is down compared to the two-figure solid oracle recorded in 2023, it remains above the average at 10 years of 4% of the company.
ORCL operational income (quarterly growth in annual sliding) data by Ycharts.
What’s moreThe Company continues to invest massively in new data centers, aimed at relying on its market share in the cloud services sector and perhaps in the long-term goal of challenging the three large on the space of cloud services (Amazon, MicrosoftAnd AlphabetGoogle).
In any case, the case of Taurus revolves around the increase in the request for AI data center, which leads to higher income growth which would justify its price / benefit ratio (P / E) of 34 and its important capital expenses on the construction of new data centers.
In a word, Oracle is an excellent stock for investors who are Haussier on AI demand and wishes to focus on the growth of the data center.
Amazon
While Oracle Stock represents an almost pure game on the growth of the Data Center based on AI, Amazon is a more diverse stock of AI.
First of all, This is the largest cloud service company, thanks to its Amazon Web Services (AWS) division. AWS alone generates more than $ 100 billion in annual income and, according to data compiled by Statista, holds a share of 30% of the world market for cloud services against 3% for Oracle.
However, Amazon has even more AI fuel in the tank. In addition to his cloud service company, he develops his own AI chips. These chips, known as trainium, will be used for training and inference for AWS, ideally reducing costs and reducing dependence on suppliers like Nvidia.
And management has invested $ 8 billion in Anthropic, a start-up focused on the development of AI solutions like its assistant Claude AI. Research or breakthroughs developed at Anthropic could find their way in Amazon operations, similar to the path Microsoft has integrated chatgpt into some of its products.
Finally, Amazon’s massive electronic commerce activities have many opportunities for the company To take advantage of AI to generate efficiency and cost savings that could improve its results. Whether you are improving inventory management, cheaper shipping routes or personalized advertising, it could take advantage of AI to make your business more profitable.
In summary, Amazon is an AI conglomerate which pursues several ways with regard to the AI boom. Although the growth of the data center remains an important factor, it is far from being the only way the company will benefit from AI in the future.
What is the best IA stock: Oracle or Amazon?
In a word, this decision goes to the individual investor. For those who highlight the growth of the data center driven by AI, Oracle can be the best choice. HoweverAmazonwith all its diversified AI initiatives, maybe The best choice for investors with a wider thesis.
Although the two actions remain intriguing, I lean towards Amazon, given its more complete size and scale.
Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Jake Lerch has positions in Alphabet, Amazon and Nvidia. The Motley Fool has positions and recommends Alphabet, Amazon, Microsoft, Nvidia and Oracle. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Motley Fool has a policy of disclosure.
