Amazon Edges Out Oracle as Cloud Computing Market Leader

Oracle and Amazon are among the leading cloud computing companies, but investors have concerns about their financials and growth prospects.

Oracle's infrastructure may be cheaper and more suitable for AI workloads, but its heavy dependence on OpenAI has raised questions about the security of its massive backlog, which now stands at $638 billion. The company has borrowed heavily to fund its investments, increasing its debt to $129.5 billion, and its free cash flow was negative $23.7 billion in fiscal 2026.

Amazon, on the other hand, is a more diversified company with a strong e-commerce business and a pioneering role in cloud computing. Its backlog of $496 billion is up from $364 billion in the prior quarter, but its long-term debt has increased to $128.9 billion, and it plans to spend $220 billion in capital expenditures in 2026.

Despite these challenges, Amazon's P/E ratio of 21 looks attractive compared to Oracle's 25. However, investors may be better off choosing Amazon due to its diversified business and lower debt levels.