Oracle debt spirals toward 2008-era danger zones, Morgan Stanley sounds the alarm; Is ORCL still a buy before earnings?

Oracle debt is spiraling toward 2008-era danger, with five-year CDS jumping to 125 bps and possibly hitting 200 bps in 2026 as AI spending soars. Oracles debt has surged to $104 billion in FY2025 and may hit $290 billion by FY2028 as free cash flow turns negative for the first time since 1999. Ratings outlook is now negative. Other hyperscalers remain stronger with large cash reserves. AI capex is rising fast to $600 billion by 2027, intensifying credit risks.