Oracle is emerging as an important benchmark for AI-related market risks

This article first appeared on GuruFocus.

oracle (ORCL, Finance) draws increased attention in credit markets as investors pay attention beyond stock prices to assess the risk associated with broader artificial intelligence trading. Market participants say the company’s credit default swap levels, which have tripled recently, have become an indicator of concerns about high spending and rising debt related to AI infrastructure.

Traders are increasingly focused on credit spreads between major cloud and AI infrastructure providers as data center investments outpace cash flow and companies rely more heavily on debt markets. Some investors reduce their exposure after a volatile market reversal and enter protection mode at year-end.

Analysts note that the removal of positioning reflects risk management rather than signs of general economic weakness. Recent selling in crowded AI-linked stores has been attributed to portfolio rebalancing following extended gains. Historical…