Amazon Poised to Benefit More Than Oracle in Next Five Years

Cloud stocks Oracle and Amazon are among the industry's leaders, but one of them is poised to benefit more than the other in the next five years.

Oracle's backlog surged after its $300 billion partnership with OpenAI last fall, but the deal has cast doubt on the security of that future business. The company also borrowed heavily to add to its infrastructure and now has a total debt level of $129.5 billion, up from $92.6 billion one year ago.

In contrast, Amazon's diverse enterprise benefits from a recession-resistant e-commerce business and is well-positioned to benefit from the growth of the AI market. The company has a backlog of $496 billion and offers a more complete set of tools for cloud computing and AI infrastructure.

Assuming the AI industry continues to grow as predicted, both stocks should beat the market. However, Amazon's diversity and client base make it less dependent on any single large client, and it is likely to recover faster if the AI story does not develop as expected.