By Diego Almada Lopez
Publication Date: 2026-10-10 12:35:00
The bond market has started asking awkward questions about the AI buildout. Oracle and Broadcom are feeling it in their share prices. Nvidia, so far, mostly isn’t.
What the credit market is signaling
A credit default swap, or CDS, works like an insurance policy on a company’s debt. If you hold the bonds and worry the issuer might not pay, you buy protection. The price of that protection is quoted as a spread in basis points, where 100 basis points equals one percentage point. When the spread rises, traders are paying more to hedge against default.
Since mid-2026, those spreads have been climbing for major tech firms tied to the AI capital spending boom. Nearly $500 billion in AI-related borrowing is expected as of 2026. Oracle and Broadcom are among the companies that have tapped debt markets to fund the push.
By early October 2026, the strain showed up clearly in the numbers. Broadcom’s five-year CDS hit a new high of 136 basis points. Oracle’s…
