Karishma Vanjani
Bond traders were largely unconcerned by Tuesday's panic about artificial intelligence.
A Wall Street Journal report said OpenAI missed its own revenue and user targets. Stocks of companies heavily invested within the AI ecosystem got dinged as investors feared the spending spree on AI may not result in massive capital gains after all. That kind of knee-jerk reaction wasn't seen in the bond market where prices of debt from companies like Oracle didn't move much.
Oracle bonds that mature in July 2036 saw their mid price, or the average price between what the buyer is willing to pay or a seller is asking, fall to $82.36, down from $83.02 earlier, according to LSEG data sourced by Dow Jones Market data team.
Yields, which rise when prices fall, were at 6.232% late Tuesday, up from 6.133% on Monday. These yields are what's known as yield to worst, the lowest possible yields investors can receive except in the case of a default.
The increase of 0.099 percentage points in yields isn't big. Compare it with the jump of 0.128 percentage points seen on Dec. 11 when the company said spending on AI infrastructure drove its higher capital expenditure forecast. The average move, in either direction, for this Oracle bond has been 0.05 percentage points in 2026 so far.
Oracle debt has kind of become the metric to judge the risk in debt of blue-chip companies heavily into AI. That is because unlike the other main hyperscalers -- Amazon.com, Meta Platforms, Microsoft, and Alphabet -- Oracle has more debt compared with its profits, making it more vulnerable to market's potential loss of enthusiasm on AI.
At the end of 2025, Oracle's gross debt was 4.1 times its Ebitda, or earnings before interest, taxes, depreciation, and amortization, while Microsoft's gross debt was 0.22 times its Ebitda. Ratios of the three other hyperscalers were also below one.
The lack of reaction in Oracle's bonds contrasted with Oracle's shares, which were down a more marked 4.1% on Tuesday. Bonds are generally less volatile than stocks. Oracle's bonds are also investment grade, or have good creditworthiness despite the debt, which makes them relatively stable.
Much smaller company CoreWeave, which has multiple cloud-computing deals with OpenAI, saw a mildly negative reaction in the bond market too. Mid price on its bonds that mature in October 2031 are at $99.94, down from $100.55 earlier. This bond was just issued on April 14.
Yields on CoreWeave bonds increased to 9.81% on Tuesday from 9.64% on Monday; the gain was 0.17 percentage points.
Equity investor fear the hype around AI has gone too far. The bond market needs more convincing -- a series of big tech earnings can do the job. Microsoft reports after the close of trading on Wednesday. Apple reports on Thursday.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 28, 2026 18:47 ET (22:47 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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