Oracle stock is up 2% in morning trading, sitting at $157.13, as analysts issue fresh notes and investors position themselves ahead of next week's earnings report.

The move builds on Thursday's 5.7% jump, which was triggered by Federal Reserve Governor Christopher Waller signaling a preference for holding interest rates steady until more inflation data comes in. That is a meaningful data point for Oracle, which is carrying tens of billions in debt to fund its AI data center build-out. For a company financing massive capital expenditure largely through borrowing, the rate environment directly shapes its interest costs and the attractiveness of raising additional debt.

Morgan Stanley Raises Target on Margin Outlook

Morgan Stanley lifted its price target to $210 from $207, keeping an Equalweight rating. The revision is based on an improved gross margin outlook for Oracle's GPU-as-a-Service business, which rents out Nvidia GPU capacity to customers training and running AI models. The firm applied roughly 19 times its calendar year 2028 non-GAAP EPS estimate of $10.98 to arrive at the new target.

The stock is still down about 20% year-to-date, trading at a discount to its historical valuation. Oracle's PEG ratio sits at 0.77, and InvestingPro flags the stock as undervalued relative to near-term earnings growth. Gross profit margin has held at 66% over the last twelve months.

Analyst Activity Ahead of Earnings

Bernstein reiterated its Outperform rating and suggested Oracle may be approaching the end of its need to raise additional capital. That would be a meaningful shift for a company that has leaned heavily on debt to finance its AI infrastructure ambitions. Bernstein also noted Oracle could become the third-largest hyperscaler, a title currently held by far larger cloud operators like Amazon Web Services, Microsoft Azure, and Google Cloud — a positioning shift that would mark Oracle's transformation from legacy database vendor to core AI infrastructure provider.

Jefferies kept its Buy rating but cut its price target to $290 from $320. The firm said the key numbers to watch are 115% OCI revenue growth and a 41% operating margin. Oracle Cloud Infrastructure, the segment that houses the GPU compute business, has been the company's fastest-growing unit and the centerpiece of its AI strategy.

Mizuho also reiterated an Outperform rating with a $320 price target, citing an expanded contract with the Department of Veterans Affairs. The contract ceiling increased by roughly $17 billion and could extend through May 2031. Government contracts of this length provide recurring, predictable revenue that contrasts with the lumpier economics of building out AI data centers.

What to Watch on September 10

Options data points to a potential 10% move in either direction when Oracle reports Q1 fiscal year 2027 results on September 10, after market close.

The broader market is not giving Oracle much of a lift today. The S&P 500 is down 0.1% and the Nasdaq is barely in positive territory. Oracle is moving on its own news flow.

Execution risk and limited free cash flow through the forecast period are the key concerns Morgan Stanley cited for keeping its rating at Equalweight despite the raised target. That tension — between headline revenue growth from AI demand and the heavy capital spending and debt that fund it — is the central question analysts are asking across the coverage spectrum this week.

Jefferies is watching OCI growth and margin performance as the clearest signals of whether Oracle's AI data center investment is translating into results.

The Veterans Affairs contract expansion, which Mizuho highlighted this week, adds optional periods that could stretch the deal through May 2031, giving Oracle a long-term government revenue anchor.