Oracle cloud grows 121% to $7.388B, still far behind AWS

Oracle and Amazon just reported earnings that raise a question about the future of cloud infrastructure. Oracle's infrastructure arm is growing much faster than AWS, but AWS still brings in far more money. Both companies are spending heavily on AI datacenters, so the capacity they build for 2027 will determine how much of the revenue gap closes.

Oracle's approach stands out because much of its growth runs through AWS itself. Multicloud database revenue grew 353%, and Oracle Interconnect for AWS is now generally available, letting customers run Oracle databases across different clouds. Amazon counters with cost: its custom Graviton chips run at 98% of the top 1,000 EC2 customers, and Anthropic committed up to 5 GW of Trainium capacity. Oracle, by contrast, must buy its GPUs from outside suppliers.

The financial picture is the real test. Oracle's free cash flow came in at -$5.4 billion, and the company expects fiscal 2027 capex of $90 billion to $95 billion with no timeline for positive free cash flow. Amazon's trailing free cash flow also turned negative at -$7.6 billion, but its 2027 capacity is largely reserved. Oracle fell 49.79% over the past year while Amazon gained 16.02%, and Oracle trades near 18x forward earnings versus 24x for Amazon. The outcome hinges on whether Oracle can show a credible path to positive free cash flow, or whether the funding burden keeps the gap wide.