Oracle default risk indicator (CDS) surges to a historic high

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Golden Finance reported that on July 19, Oracle’s credit risk indicators rose to a historical peak, reflecting deeper concerns in the market about the sustainability of the AI investment boom.
According to ICE Data Services data, Oracle credit default swap (CDS) spreads rose by about 10 basis points on Friday to 198.23, setting a new all-time highest closing record, surpassing the prior peak of 198.18 set on March 27. This means the cost investors must pay to protect Oracle’s debt against default has risen to unprecedented levels.
In the Bloomberg U.S. investment-grade corporate bond index, Oracle has about $117B worth of bonds, making it the largest company in the index outside the financial industry by scale.
Meanwhile, the launch of the new AI model Kimi K3 has raised concerns in the market about the competitiveness of existing AI products, weighing on technology stocks overall. The above signals combined have further deepened market doubts about Oracle’s aggressive capital expenditure strategy and the outlook for returns on AI investments.
ORCL-3.92%
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