By Faizan Farooque
Publication Date: 2026-01-23 17:16:00
This article first appeared on GuruFocus.
oracle (ORCL, Finance) is under delivery pressure about his ambitions in the field of artificial intelligence to Morgan Stanley warned that its GPU-as-a-service strategy could weigh on earnings and balance sheet strength.
The bank said Oracle’s large-scale data center expansion represents a significant revenue opportunity, but leaves little room for error. In a note to clients, analyst Keith Weiss warned that rising capital requirements and slower monetization of GPU capacity will likely push profits below targets.
Morgan Stanley lowered its price target on Oracle to $213 from $320 and reiterated its equal-weight rating. Weiss said the company’s revised model forecasts earnings per share of $8.51 and $10.02 for fiscal 2028 and 2030, respectively, both well below Oracle’s long-term targets.
The analysis also highlighted the increasing need for financing. Morgan Stanley forecasts cumulative capital spending of $275 billion for fiscal years 2026 to 2028, well above…
