By Sweta Killa
Publication Date: 2026-05-29 22:01:00
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Wall Street traders are increasingly hedging exposure to Big Tech credit as hedging activity tied to AI-era borrowing surges, pushing outstanding credit default swap (CDS) volume to record levels.
In a Wednesday post on X, The Kobeissi Letter stated that the total net notional value of outstanding credit default swaps on major tech firms jumped to a record $12.5 billion. It is up $1 billion so far in the second quarter of 2026.
The total value of debt being insured against default on these companies has risen 500% since the second quarter of 2025.
Big Tech With Highest CDS Exposure
Oracle Corp. leads the pack with $6.5 billion, followed by Amazon.com Inc and Alphabet Inc at $2 billion each. Microsoft Corp., Meta Platforms Inc., and Nvidia Corp. stand at $1 billion, $800 million and $200 million, respectively.
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The increase in protection comes amid growing concerns over a potential AI bubble. The sector is undergoing substantial investment while simultaneously facing rising costs and inflation pressures.
Jordi Visser, head of AI Macro Nexus Research at 22V Research, noted that about 12% to 18% of a projected $8 trillion AI infrastructure buildout has been completed so far, highlighting potential supply chain bottlenecks in key components like high-bandwidth memory chips and power systems.
Hedging activity at Bank of America…
