By Robin Wigglesworth
Publication Date: 2025-11-27 12:37:00
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Oracle has emerged as the weakest member of the AI hyperscaler herd, and hedge funds have now shorted both companies share And Debts. Credit analysts at Morgan Stanley expect things to get worse.
The investment bank’s analysts, Lindsay Tyler and David Hamburger, had previously recommended investors to buy Credit default swaps on Oracle, but hedges the risk by taking long positions in its bonds. In other words, a “base trade” based on the view that the CDS would have the greatest impact on Oracle’s deteriorating credit rating.
They are now recommending that investors abandon the bonds and simply go long Oracle CDS due to its “funding gap, growing balance sheet, investment and obsolescence risk, ratings pressure, counterparty risk, and more.”
However, it is mainly due to Oracle’s increasing financial liabilities – both in the form of bonds and in the form of data…
