Morgan Stanley Flags GPU-as-a-Service Buildout as EPS Pressure Point for Oracle Corporation (ORCL)

We recently compiled a list of the 20 Most Profitable Stocks of the Last 20 Years. The third stock on our list is Oracle Corporation.

TheFly reported on January 23 that Morgan Stanley lowered its price target for ORCL to $213 from $320 and maintained an Equal Weight rating. The firm acknowledged that GPU-as-a-Service represents a sizable revenue opportunity but noted that the buildout is likely to push EPS below company targets and increase funding needs. Additionally, Morgan Stanley stated that it believes ORCL has no obvious way to meet its EPS targets, which is reflected in the current share price and the lowered objective.

Separately, on January 22, Oracle Corporation (NYSE:ORCL)’s shares rose $4.02 (2.31%) to around $177.90. Options activity was near average, with calls slightly outpacing puts, giving a put/call ratio of 0.54 (vs. 0.81 typical). While the flattening put-call skew indicated a somewhat positive tone, implied volatility dropped 2.16 points to 46.84, over the 52-week median, suggesting an anticipated daily move of about $5.25.

Oracle Corporation (NYSE:ORCL) is a global technology company specializing in database software, cloud solutions, and enterprise software products. It provides businesses with tools for data management, analytics, and digital transformation.

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