Density Functional Theory applying the generalised gradient approximation is used to study the phase stability of (AlxCr1−x)2O3solid solutions in the context of physical vapour deposition (PVD). Our results show that the energy of formation for the hexagonal α phase is lower than for the metastable cubic γ and B1-like phases–independent of the Al content x. Even though this suggests higher stability of the α phase, its synthesis by physical vapour deposition is difficult for temperatures below 800 °C. Aluminium oxide and Al-rich oxides typically exhibit a multi-phased, cubic-dominated structure. Using a model system of (Al0.69Cr0.31)2O3 which experimentally yields larger fractions of the desired hexagonal α phase, we show that point defects strongly influence the energetic relationships. Since defects and in particular point defects, are unavoidably present in PVD coatings, they are important factors and can strongly influence the stability regions. We explicitly show that defects with low formation energies (e.g. metal Frenkel pairs) are strongly preferred in the cubic phases, hence a reasonable factor contributing to the observed thermodynamically anomalous phase composition.