For much of 2025, Amazon and Oracle found themselves on the wrong side of the artificial intelligence narrative. While Nvidia, Microsoft, and a handful of AI‑first startups captured investor enthusiasm, these two tech giants were frequently dismissed as "AI laggards" or "infrastructure followers." But Deutsche Bank thinks the market has it backward.
In its latest Q1 2026 "Fresh Money" report, Deutsche Bank placed Amazon (AMZN) and Oracle (ORCL) on its list of high‑conviction investment ideas—arguing that both companies are positioned to benefit from the next phase of the AI infrastructure boom.
The call comes at a moment when investor sentiment is still lukewarm. Amazon gained just 5% in 2025, far behind the S&P 500’s 16% rise, while Oracle has fallen more than 40% from its September peak. But Deutsche Bank analysts say the pessimism is misplaced—and that both companies are entering 2026 with stronger fundamentals than the market realizes.
Amazon: The "AI Loser" Label May Finally Fade
Deutsche Bank analyst Lee Horowitz believes Amazon’s AI narrative is about to shift dramatically. Despite the company’s massive cloud footprint and its recent partnership with OpenAI, investors have been slow to reward Amazon for its AI investments.
Horowitz argues that the market is overlooking several key drivers:
1. AWS Is About to Add 15 GW of New Compute Capacity
That’s one of the largest cloud infrastructure expansions in the company’s history. Horowitz expects this build‑out to reignite AWS revenue growth, which slowed in 2024 but began reaccelerating late last year.
2. The OpenAI Partnership Is "Just the Beginning"
While the collaboration grabbed headlines, Horowitz says the real story is Amazon’s broader push to integrate third‑party and proprietary AI models into AWS. The company is positioning itself as a neutral, multi‑model platform—an approach that could attract enterprises wary of vendor lock‑in.
3. E‑commerce Remains a "Smooth‑Running Machine"
Even in a cooling retail environment, Amazon continues to gain global market share. Logistics improvements are boosting margins, and the company’s fulfillment network is now operating at its most efficient level in years.
4. Rufus May Be Amazon’s Most Undervalued AI Asset
Rufus, Amazon’s AI shopping assistant, is quietly becoming a major revenue driver. Horowitz estimates it has already generated $10 billion in incremental revenue—yet the market barely acknowledges it.
Bank of America analyst Justin Post echoed this view earlier in the week, naming Amazon his top pick for 2026 and arguing that Rufus could help Amazon dominate the emerging "proxy shopping" category, where AI agents make purchasing decisions on behalf of users.
5. Operating Profit Growth Could Hit 20%
Horowitz believes Amazon’s operating profit could grow at a 20% annual rate, driven by AWS acceleration, retail margin expansion, and AI‑powered automation across the company.
In short, Deutsche Bank sees Amazon not as an AI laggard, but as a company whose AI monetization story is just beginning to unfold.
Oracle: From Market Darling to Oversold—and Now a Rebound Candidate
Oracle’s story has been even more dramatic. Last September, the company briefly became one of the hottest AI stocks on Wall Street after announcing its AI ordering system and unveiling massive cloud infrastructure plans. But concerns about debt levels and financing needs quickly cooled investor enthusiasm.
The stock has since dropped more than 40%, but Deutsche Bank analyst Brad Zelnick argues that the sell‑off has gone too far.
1. Oracle’s Future Contract Value Has Exploded
Two years ago, Oracle’s backlog of future cloud and AI contracts stood at $65 billion. Today, it exceeds $500 billion—a nearly eight‑fold increase.
Zelnick says this surge reflects Oracle’s growing role in the AI infrastructure supply chain, particularly in deploying large‑scale GPU clusters.
2. Financing Concerns Are Temporary
Zelnick expects Oracle to provide "clearer financing details" in upcoming quarters, which should ease investor anxiety. He argues that the market has become overly fixated on debt while ignoring the company’s operational momentum.
3. Oracle Has a Technical Edge in Parallel Computing
Oracle’s decades‑long experience in high‑speed data processing and parallel computing gives it a structural advantage in building AI‑optimized cloud environments. This expertise is becoming increasingly valuable as enterprises shift from experimentation to large‑scale AI deployment.
4. The Market Is Undervaluing Oracle’s Traditional Cloud Business
While AI headlines dominate the conversation, Oracle’s non‑AI cloud business has quietly grown 40% over the past two years, gaining share from larger competitors.
Zelnick believes this steady growth provides a strong foundation for Oracle’s AI ambitions—and that the market is underestimating the company’s ability to convert its massive contract backlog into revenue.
Why Deutsche Bank Thinks Both Stocks Are Set for a Reversal
Across both companies, Deutsche Bank sees a common theme: the market is mispricing long‑term AI infrastructure demand.
The next phase of AI growth won’t be driven solely by model developers. It will require:
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Massive cloud capacity
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High‑density GPU clusters
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Scalable data pipelines
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Enterprise‑grade AI tools
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Multi‑model orchestration platforms
Amazon and Oracle sit at the center of this ecosystem.
AWS remains the world’s largest cloud provider, and Oracle is becoming a preferred partner for companies deploying large GPU clusters at scale. Both companies are investing heavily in infrastructure that will be essential for the next wave of AI adoption.
Investor Takeaways
Amazon (AMZN)
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AWS capacity expansion could reignite cloud growth
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Rufus is a major but underappreciated revenue driver
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E‑commerce margins continue to improve
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Operating profit growth could reach 20%
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Market sentiment may shift as AI monetization becomes clearer
Oracle (ORCL)
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Contract backlog has surged to $500B+
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Financing concerns likely to ease
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Strong technical advantage in parallel computing
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Traditional cloud business growing 40% over two years
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Stock may be oversold after a 40% decline
Outlook: From "AI Losers" to 2026 Comeback Stories
Deutsche Bank’s message is clear: the market has been too quick to dismiss Amazon and Oracle in the AI race. Both companies are deeply embedded in the infrastructure layer that will power the next decade of AI growth.
If Deutsche Bank is right, 2026 could be the year these so‑called "AI losers" become two of the biggest comeback stories in tech.