From Popular Science:
This colorful cloud over Jonggol, Indonesia, is not a portal to the land of Oz. Or the rainbow road into Asgard from Norse mythology. Or even an AI-generated image. They are iridescent clouds, a rare type of cloud that appear when raindrops interact with sunlight.
According to WABC meteorologist Lee Goldberg, the small water droplets or ice crystals inside of the cloud scatter sunlight, diffracting the light into a spectrum of colors. The rainbow effect is most visible when the sun is partially blocked by something like a mountain or thicker clouds.