New York, January 23, 2026, 17:59 EST — After-hours
- Oracle shares ended the day down 0.6%, slipping further in after-hours trading
- Morgan Stanley lowered its price target for Oracle, citing increased funding demands driven by AI chip capacity expansion
- Reuters reported that Oracle is set to acquire a 15% stake in the new U.S. joint venture of TikTok
Oracle shares slipped in after-hours trading Friday following a price target cut from Morgan Stanley. The bank warned Oracle faces “little room for error” as it ramps up GPU-as-a-service — leasing graphics processing units crucial for AI model training and operations. Oracle ended the session down 0.59% at $177.13, slipping further to $176.95 after the bell. 1
The call comes as investors wrestle with how much Oracle might need to spend—and borrow—to support a jump in long-term cloud commitments linked to AI workloads. Back in December, Oracle raised its fiscal 2026 capital expenditure forecast by $15 billion, up from the $35 billion projected in September. Analysts flagged the funding risk as an active concern. 2
Oracle made headlines again this week as ByteDance announced it had sealed a deal to form a majority American-owned TikTok USDS joint venture, designed to protect U.S. user data and sidestep a potential U.S. ban. According to Reuters, Oracle, Silver Lake, and Abu Dhabi-backed MGX will each own 15% of the venture, with ByteDance holding 19.9%. 3
Morgan Stanley’s Keith Weiss flagged the GPU rental segment as a potentially “sizable revenue opportunity,” but cautioned the expansion “will push EPS below targets and drive materially higher funding needs.” The bank slashed its price target from $320 to $213 and kept its equal-weight rating. It also noted credit risks might not be fully priced into spreads; CDS, or credit default swaps, are insurance on a borrower’s debt. 4
Some analysts sounded more optimistic. Guggenheim stuck to its buy rating and maintained a $400 price target. KeyBanc also held an overweight rating, targeting $300, according to a summary on Investing.com. 5
Oracle insists its pipeline underpins years of growth ahead. In its latest quarterly report, the company revealed remaining performance obligations — revenue contracted but not yet booked — climbed to $523 billion. Finance chief Doug Kehring attributed the boost to fresh deals with Meta, Nvidia, and others. 6
Traders are zeroing in less on the headline backlog and more on Oracle’s pace of converting AI capacity into revenue. The financing strategy behind the ramp-up will also be under close watch. Additional info on the TikTok venture’s operating setup and timeline could shift the story heading into next week.
The risk scenario is clear. Should demand or prices for rented AI chips weaken, Oracle might face hefty data center expenses and financing charges well before any profits materialize. Plus, TikTok’s U.S. setup has been under political fire for years and could draw fresh scrutiny despite changes in ownership.
Oracle’s fiscal third-quarter report, due March 9, marks the next big catalyst, according to Zacks’ earnings calendar. Investors will watch closely for shifts in capital spending and any updates on funding needs as the company releases its numbers. 7
