Morgan Stanley Cautions That Oracle's Debt Risk May Approach 2008 Crisis Levels
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 28 2025
0mins
Should l Buy ORCL?
Source: Benzinga
Credit Risk Concerns: Oracle Corp is facing heightened credit risk as its debt insurance costs rise, with Morgan Stanley warning of increasing stress on its balance sheet due to aggressive borrowing for AI data-center expansion.
Debt and Financing Strategy: The company has raised $18 billion in bonds this year and has $56 billion in project financing, but analysts express concerns over a widening funding gap and potential obsolescence of technology investments.
Market Reaction: The credit market is signaling caution, with expectations that credit-default swap rates could rise significantly, indicating that investors are wary of Oracle's financial strategy amid its ambitious AI plans.
Investor Sentiment: While Oracle is not in immediate trouble, the market is demanding assurance that its AI investments will not jeopardize its financial stability, urging shareholders to pay attention to the company's debt management.
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Analyst Views on ORCL
Wall Street analysts forecast ORCL stock price to rise
34 Analyst Rating
25 Buy
9 Hold
0 Sell
Moderate Buy
Current: 150.310
Low
180.00
Averages
309.59
High
400.00
Current: 150.310
Low
180.00
Averages
309.59
High
400.00
About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Financial Strain Intensifies: Oracle's stock has plummeted 37% over the past six months and 24% year-to-date, reflecting dual concerns over AI spending and a broader software stock sell-off, prompting investors to carefully assess its financial health.
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- AI Investment Risks: Despite expectations that the top four hyperscalers will invest $700 billion in AI data center equipment, such capital expenditures come with significant risks, particularly as hardware depreciation could drag on earnings long-term, and the market's reaction to AI spending is becoming cautious.
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