Morningstar

Oracle: Data Center Force Majeure Implies Possibility of $25 Bln Revenue Delay

A delay in the Project Jupiter data center could also put Oracle’s investment grade debt rating at risk.

The Oracle logo is on display on a pavilion.
Joan Cros/NurPhoto via Getty
Securities in This Article
Oracle Corp
(ORCL)

Key Morningstar Metrics for Oracle

  • Fair Value Estimate
    : $220
  • Morningstar Rating
    : ★★★★
  • Morningstar Economic Moat Rating
    : Narrow
  • Morningstar Uncertainty Rating
    : Very High

Oracle Stock Update

Bloomberg reported on Sept. 24 that Oracle ORCL sent Stack Infrastructure, a Blue Owl subsidiary, a force majeure notice to protect itself from payment obligations if the Project Jupiter data center in New Mexico is delayed. Oracle shares fell 5% in early trading.

Why it matters: If the project is delayed, we are confident that Oracle can protect its financial interests against the data center developer. However, given the missing capacity, revenue from Oracle Cloud Infrastructure customers like OpenAI may decrease, putting Oracle’s long-term revenue goals in question.

  • Project Jupiter’s capacity of 2.45 gigawatts means that Oracle would potentially need to push back the timeline for $25 billion or more of its revenue, which represents a sizable part of our OCI revenue forecasts of $86 billion and $136 billion for fiscal 2028 and 2029, respectively.
  • A potential delay could also pose a challenge for Oracle in maintaining its investment-grade credit rating. Oracle banks on cash inflows from artificial intelligence data centers to keep its leverage in check. A higher cost of borrowing inevitably squeezes the margin of new data center projects.

The bottom line: We maintain our $220 fair value estimate for narrow-moat Oracle as Project Jupiter’s delay is only a possibility at this stage. Our base case assumes that Oracle can keep up with its delivery pace and fulfill its long-term growth targets. The shares currently look undervalued.

  • We think the market’s reaction does not fully represent the downside of an actual delay that would hurt Oracle’s long-term revenue guidance. The stock could see another selloff if data center delays start to affect Oracle’s performance at the company level.

Big picture: Pure cloud service providers like Oracle and CoreWeave are vulnerable to project delays because they rely on third-party data center operators to build the power shell. In November 2025, a data center delivery delay for CoreWeave sent the stock down 16%.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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