AI Market Could Soar 6 Times by 2030: 2 Brilliant AI Stocks to Buy Now (Hint: Not Nvidia)

Oracle's Q1 FY26 results showcased significant AI infrastructure momentum, with revenue up 12% to $14.9 billion, cloud revenue surging 27%, and remaining performance obligations (RPO) soaring 359% to $455 billion, driven by demand for its AI-optimized data centers. Concurrently, Snowflake reported robust Q2 FY26 growth, with revenue increasing 32% to $1.1 billion and RPO up 33%, as AI use cases influenced nearly 50% of new client accounts. Both companies are positioned as critical enablers in the rapidly expanding AI market, with Oracle's rich 48x forward earnings valuation reflecting investor confidence in its substantial backlog.

Analysis

Oracle (ORCL) is demonstrating a significant acceleration in its transition to a key AI infrastructure provider, underscored by its first-quarter fiscal 2026 results. The company reported a 12% year-over-year revenue increase to $14.9 billion, but the primary growth driver was its cloud segment, which saw revenue climb 27% to $7.2 billion. This was fueled by a 54% surge in Cloud Infrastructure (OCI) revenue and a remarkable 1,529% increase in multicloud database revenue. The most critical forward-looking indicator is the 359% year-over-year expansion of its remaining performance obligations (RPO) to an immense $455 billion, signaling substantial contracted future revenue and supporting its planned $35 billion in fiscal 2026 capital expenditures. Concurrently, Snowflake (SNOW) continues its strong growth trajectory as an enterprise data platform, with second-quarter fiscal 2026 revenue rising 32% to $1.1 billion and RPO growing 33% to $6.9 billion. Key operational metrics remain robust, including a 125% net revenue retention rate and a 6-point improvement in non-GAAP operating margin to 11%. Critically, AI has become a primary adoption catalyst, influencing nearly 50% of new client accounts. While Oracle trades at a premium 48x forward P/E, reflecting confidence in its massive backlog, Snowflake's valuation has corrected to 18.2x sales, significantly below its five-year average of 34.2x.

Key Decisions for Investors

• For Oracle, the monumental $455 billion in remaining performance obligations provides strong forward revenue visibility, but its premium 48x forward P/E valuation requires conviction that this backlog will translate into sustained high-margin cloud growth, justifying its multiple over peers.
• Investors considering Snowflake should note its robust fundamentals, including 32% revenue growth and 125% net revenue retention, coupled with a valuation that has corrected significantly from its historical average; however, they must be prepared for potential near-term revenue volatility given its usage-based model.
• These two companies represent distinct investment theses within the AI ecosystem: Oracle as a large-scale infrastructure play whose massive backlog is fueling a successful business transformation, and Snowflake as a high-growth data platform whose adoption is increasingly catalyzed by enterprise AI initiatives.