Credit default swap premiums for Nvidia's $10 million debt have surged to $82,000 annually, doubling since early July. This spike reflects growing investor worry about the AI giant's financial health as the market digests recent earnings and industry shifts.
Other tech heavyweights tied to AI like Alphabet, Amazon, Meta, Broadcom, and SpaceX have also seen record highs in their CDS spreads. Alphabet, for example, experienced a jump to 67 basis points shortly after posting its first negative quarterly free cash flow since going public in 2004, signaling investors are demanding more protection against potential default.
Nvidia’s CDS reached a record 82 basis points on Monday, marking the sharpest single-day increase since these contracts launched in November 2025, according to ICE Data Services. Meanwhile, Oracle, valued at $330 billion, faces an even steeper premium above 215 basis points following S&P Global’s downgrade to the lowest investment-grade rating. Its 2056 bonds yield 6.7%, with spreads widening significantly over US Treasuries.
CoreWeave stands out with CDS spreads topping 855 basis points this week, pricing in about a 50 percent default chance within five years. The surge in CDS trading volume for AI-related stocks hit nearly $650 million in Q2, up 20 percent from Q1 and nearly six times higher than last year, underscoring a worrying trend for Wall Street's risk appetite in this sector.
Big tech's rising debt costs highlight how investors are recalibrating their approach to AI infrastructure's financial risks. The sharp increase in CDS premiums sends a clear message: confidence in AI firms' creditworthiness is under pressure as market conditions evolve.
This content is for informational purposes and should not be considered financial advice.
