Credit risk indicators for major technology companies reached new highs on October 20, 2026. Investors are concerned about the market capacity to absorb upcoming bond issuances from hyperscalers and chipmakers.
Credit default swaps (CDS) reflect growing market anxiety. Oracle currently faces an implied five-year default probability exceeding 20%, while SpaceX is at approximately 16%. CoreWeave shows signs of distress with CDS trading above 1,100 basis points, costing over 11% annually to insure its debt.
In 2026, firms including Oracle, Broadcom, and SpaceX issued nearly $500 billion in new debt for AI infrastructure. Total capital expenditure for these companies is projected to surpass $1 trillion between 2025 and 2026. Broadcom alone may require $600 billion for AI-related costs in the coming years.
S&P Global has issued a warning regarding potentially under-recognized AI-linked liabilities. Furthermore, several companies are expected to report negative free cash flows through 2027, raising questions about their long-term debt management capabilities.
