Credit default swaps (CDS) for major technology firms involved in AI infrastructure have been rising since mid-2026. The market anticipates nearly $500 billion in AI-related borrowing for the year. Investors are increasingly scrutinizing companies with significant debt loads, leading to divergent performance between firms like Nvidia and those like Oracle and Broadcom.
By early October 2026, the five-year CDS for Broadcom reached a record 136 basis points. Oracle saw its CDS hit 261 basis points, following a credit rating downgrade by S&P. Oracle shares have declined approximately 35% year-to-date. Both companies have seen spreads widen following recent financing announcements.
Nvidia maintains a more stable position, with its five-year CDS currently ranging between 80 and 87 basis points. The company reached a record high of 82 basis points in late July 2026, which implied a default probability exceeding 7%. Unlike its peers, Nvidia's stock has remained relatively steady throughout the year.
Broader industry concerns are evident, as Meta and Alphabet also recorded peak CDS levels in July 2026. While Nvidia remains resilient, its performance is linked to the capital expenditure capacity of its customers. Rising borrowing costs for data center operators could potentially pressure future demand for AI infrastructure.
