Two AI Cloud Stocks for June

Published Date : 15-06-2025 

As businesses increasingly turn to cloud computing for AI capabilities, two companies stand out for their robust growth potential and competitive edge. Oracle and Google Cloud are poised for significant gains, driven by their investments in data centers and advanced cloud infrastructure. 

Artificial intelligence (AI) is providing profitable opportunities for businesses and investors. One market where much of the groundwork is being laid for long-term productivity gains from AI is cloud computing. The cloud market was valued at $348 billion, according to Synergy Research, and grew 23% year over year in the first quarter.

Top cloud stocks are worth holding for the long term because of their investments in data centers, where companies store data to use with AI to gather insights, innovate, and build new products. Here are two cloud stocks trading at reasonable valuations that are poised for a bull run.

Oracle (NYSE: ORCL) stock has tripled over the last three years, but it still offers upside. This leading cloud infrastructure provider just closed the books on fiscal 2025, where it posted better-than-expected revenue. The stock popped following the report and is closing in on a new all-time high.

Oracle has gotten lost in the shadow of the leading hyperscalers like Amazon Web Services (AWS) and Microsoft Azure. But Oracle's cloud revenue growth is about to accelerate significantly, which isn't reflected in the stock's valuation.

In fiscal Q4, ended May 31, Oracle's total revenue grew 11% year over year, driven by a 52% year-over-year increase in cloud infrastructure revenue. Oracle has been capitalizing on AI demand, with more than 100 cloud regions online. In March, management stated that it is becoming the preferred cloud choice for AI training and inferencing due to the superior performance and cost of its Gen 2 cloud architecture.

Its growing data center presence, high-speed data transfer capabilities, and power capacity could give Oracle a major competitive advantage in the cloud infrastructure market. The acceleration in its cloud revenue last quarter suggests it could be entering a potent phase of high growth as AI workloads shift from training to inferencing for more sophisticated AI applications.

Management's outlook calls for its total cloud revenue growth (applications plus infrastructure) to accelerate from 24% in fiscal 2025 to surpass 40% in fiscal 2026. This could pull Oracle's cloud growth well above AWS, which hasn't been able to crack the 20% growth level over the past year.

Google Cloud, a part of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), is also making significant strides in the AI cloud market. Google Cloud has been contributing a growing percentage of profits to Alphabet, driven by its robust AI capabilities and strong partnerships. One notable partnership is with OpenAI, the developer of ChatGPT, which recently selected Google Cloud for its computing capacity needs.

Google Cloud's advanced AI models and robust infrastructure make it a preferred choice for businesses looking to leverage AI for various applications, from data analytics to machine learning. The company's investments in data centers and high-speed networks further solidify its position in the market.

Both Oracle and Google Cloud are well-positioned to capitalize on the growing demand for AI and cloud computing. Investors looking to benefit from this trend should consider these stocks for their long-term growth potential and competitive advantages. 

Frequently Asked Questions (FAQS): 

Q: What is driving the growth in the cloud computing market?

A: The growth in the cloud computing market is primarily driven by the increasing demand for AI capabilities and the need for robust data storage and processing solutions. Businesses are leveraging cloud computing to gather insights, innovate, and build new products.

Q: Why is Oracle a good investment in the AI cloud market?

A: Oracle is a good investment in the AI cloud market due to its significant cloud revenue growth, superior Gen 2 cloud architecture, and growing data center presence. The company is becoming a preferred choice for AI training and inferencing, which could lead to high growth in the coming years.

Q: How is Google Cloud contributing to Alphabet's profits?

A: Google Cloud is contributing a growing percentage of profits to Alphabet, driven by its advanced AI capabilities and strong partnerships. Notably, OpenAI selected Google Cloud for its computing capacity needs, further solidifying its position in the market.

Q: What are the key competitive advantages of Oracle in the cloud market?

A: Oracle's key competitive advantages in the cloud market include its high-speed data transfer capabilities, power capacity, and growing data center presence. These factors, combined with its superior Gen 2 cloud architecture, give Oracle a significant edge in the cloud infrastructure market.

Q: What is the outlook for Oracle's cloud revenue growth?

A: Oracle's management expects its total cloud revenue growth (applications plus infrastructure) to accelerate from 24% in fiscal 2025 to surpass 40% in fiscal 2026. This growth could position Oracle well above competitors like AWS, which has struggled to maintain high growth levels. 

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