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AI Bubble's "Weakest Link": Market Watches Oracle's Bonds as Key Indicator of AI Leverage

Wall Street credit traders are accelerating purchases of Oracle's credit default swaps (CDS), betting that the tech giant's aggressive AI infrastructure investments could trigger debt risks. This...

AI Bubble's "Weakest Link": Market Watches Oracle's Bonds as Key Indicator of AI Leverage

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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{"i18n":{"language":"en_US"},"data":{"magic":2,"id":494940321833064,"tweetId":"494940321833064","gmtCreate":1761865935584,"gmtModify":1761873884775,"author":{"id":4223091757903882,"idStr":"4223091757903882","authorId":4223091757903882,"authorIdStr":"4223091757903882","name":"Liz E","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":12,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":0,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"title":"","html":"<html><head></head><body><p>Share your opinion about this news…</p></body></html>","htmlText":"<html><head></head><body><p>Share your opinion about this news…</p></body></html>","text":"Share your opinion about this news…","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/494940321833064","repostId":1150384092,"repostType":2,"repost":{"id":"1150384092","kind":"news","weMediaInfo":{"introduction":"Global Stock Market Deep Analysis","home_visible":1,"media_name":"Deep News","id":"1039043262","head_image":"https://community-static.tradeup.com/news/8296859682db4b478146245e72de1922"},"pubTimestamp":1761813296,"share":"https://ttm.financial/m/news/1150384092?lang=en_US&edition=fundamental","pubTime":"2025-10-30 16:34","market":"nz","language":"en","title":"AI Bubble's \"Weakest Link\": Market Watches Oracle's Bonds as Key Indicator of AI Leverage","url":"https://stock-news.laohu8.com/highlight/detail?id=1150384092","media":"Deep News","summary":"Wall Street credit traders are accelerating purchases of Oracle's credit default swaps (CDS), betting that the tech giant's aggressive AI infrastructure investments could trigger debt risks. This...","content":"<p>Wall Street credit traders are accelerating purchases of Oracle's credit default swaps (CDS), betting that the tech giant's aggressive AI infrastructure investments could trigger debt risks. This move is seen as an early warning signal for the most vulnerable link in the AI bubble, with Oracle's bond performance potentially becoming a critical indicator of whether the AI investment frenzy can sustain.</p>\n<p>Latest data shows Oracle's five-year CDS costs have surged to near their highest levels since October 2023. The spread on its 4.9% coupon bonds maturing in 2033 widened by 26 basis points to 83 basis points.</p>\n<p>This trend coincides with Oracle's preparation for a $38 billion bond issuance—the largest financing deal in AI infrastructure to date—to fund data centers in Texas and Wisconsin. These facilities are part of Oracle's $500 billion Stargate project, developed in partnership with OpenAI.</p>\n<p>Market analysts warn that while the AI boom has driven U.S. stocks to record highs, Oracle's rapidly expanding debt could be where cracks first appear in the AI bubble narrative. With approximately $95 billion in outstanding debt, Oracle is already the largest non-financial corporate issuer in Bloomberg's high-grade index.</p>\n<p>**Debt Expansion Accelerates**  \nOracle's borrowing pace is intensifying. Last month, the company raised $18 billion in corporate bonds—the second-largest high-grade deal this year. Morgan Stanley predicts Oracle's net adjusted debt could triple to about $290 billion by fiscal 2028 as AI investments grow.</p>\n<p>**Credit Concerns Mount**  \nAccording to ICE Data Services, Oracle's five-year CDS costs hover near 2023 peaks, signaling investor anxiety. Morgan Stanley advises buying Oracle's five-year CDS and bonds for protection, citing deteriorating credit conditions.</p>\n<p>Nicholas Elfner of Breckinridge Capital notes that when major issuers like Oracle rapidly increase debt, it creates \"interesting secondary market dynamics\"—index trackers may overweight the bonds, while skeptics hedge with CDS.</p>\n<p>**AI Bubble's Stress Test**  \nWith annual AI infrastructure spending projected at $200 billion, doubts persist about returns. Some investors compare the AI frenzy to the dot-com bubble, warning of overvaluation and weak profitability.</p>\n<p>While Oracle's cloud/AI cash flows may mitigate default risks, market focus remains on the debt sustaining the AI bubble. As one observer noted: \"Even AI bubbles can't inflate forever—credit 'wings' eventually melt.\" Oracle's CDS trajectory may reveal the first fractures in this narrative.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>AI Bubble's \"Weakest Link\": Market Watches Oracle's Bonds as Key Indicator of AI Leverage</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAI Bubble's \"Weakest Link\": Market Watches Oracle's Bonds as Key Indicator of AI Leverage\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1039043262\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://community-static.tradeup.com/news/8296859682db4b478146245e72de1922);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Deep News </p>\n<p class=\"h-time\">2025-10-30 16:34</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<p>Wall Street credit traders are accelerating purchases of Oracle's credit default swaps (CDS), betting that the tech giant's aggressive AI infrastructure investments could trigger debt risks. This move is seen as an early warning signal for the most vulnerable link in the AI bubble, with Oracle's bond performance potentially becoming a critical indicator of whether the AI investment frenzy can sustain.</p>\n<p>Latest data shows Oracle's five-year CDS costs have surged to near their highest levels since October 2023. The spread on its 4.9% coupon bonds maturing in 2033 widened by 26 basis points to 83 basis points.</p>\n<p>This trend coincides with Oracle's preparation for a $38 billion bond issuance—the largest financing deal in AI infrastructure to date—to fund data centers in Texas and Wisconsin. These facilities are part of Oracle's $500 billion Stargate project, developed in partnership with OpenAI.</p>\n<p>Market analysts warn that while the AI boom has driven U.S. stocks to record highs, Oracle's rapidly expanding debt could be where cracks first appear in the AI bubble narrative. With approximately $95 billion in outstanding debt, Oracle is already the largest non-financial corporate issuer in Bloomberg's high-grade index.</p>\n<p>**Debt Expansion Accelerates**  \nOracle's borrowing pace is intensifying. Last month, the company raised $18 billion in corporate bonds—the second-largest high-grade deal this year. Morgan Stanley predicts Oracle's net adjusted debt could triple to about $290 billion by fiscal 2028 as AI investments grow.</p>\n<p>**Credit Concerns Mount**  \nAccording to ICE Data Services, Oracle's five-year CDS costs hover near 2023 peaks, signaling investor anxiety. Morgan Stanley advises buying Oracle's five-year CDS and bonds for protection, citing deteriorating credit conditions.</p>\n<p>Nicholas Elfner of Breckinridge Capital notes that when major issuers like Oracle rapidly increase debt, it creates \"interesting secondary market dynamics\"—index trackers may overweight the bonds, while skeptics hedge with CDS.</p>\n<p>**AI Bubble's Stress Test**  \nWith annual AI infrastructure spending projected at $200 billion, doubts persist about returns. Some investors compare the AI frenzy to the dot-com bubble, warning of overvaluation and weak profitability.</p>\n<p>While Oracle's cloud/AI cash flows may mitigate default risks, market focus remains on the debt sustaining the AI bubble. As one observer noted: \"Even AI bubbles can't inflate forever—credit 'wings' eventually melt.\" Oracle's CDS trajectory may reveal the first fractures in this narrative.</p>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU2360106780.USD":"BGF WORLD TECHNOLOGY \"A4\" (USD) INC","LU0553294199.USD":"BGF GLOBAL EQUITY INCOME \"A5G\" (USD) INC","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","BK4581":"高盛持仓","LU0738911758.USD":"Blackrock Global Equity Income A6 USD","BK4543":"AI","LU1934455863.HKD":"AB SICAV I LOW VOLATILITY TOTAL RETURN EQUITY PORT \"A\" (HKD) ACC","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","BK4534":"瑞士信贷持仓","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","BK4533":"AQR资本管理(全球第二大对冲基金)","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","LU0289960550.SGD":"AB FCP I - 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This move is seen as an early warning signal for the most vulnerable link in the AI bubble, with Oracle's bond performance potentially becoming a critical indicator of whether the AI investment frenzy can sustain.\nLatest data shows Oracle's five-year CDS costs have surged to near their highest levels since October 2023. The spread on its 4.9% coupon bonds maturing in 2033 widened by 26 basis points to 83 basis points.\nThis trend coincides with Oracle's preparation for a $38 billion bond issuance—the largest financing deal in AI infrastructure to date—to fund data centers in Texas and Wisconsin. These facilities are part of Oracle's $500 billion Stargate project, developed in partnership with OpenAI.\nMarket analysts warn that while the AI boom has driven U.S. stocks to record highs, Oracle's rapidly expanding debt could be where cracks first appear in the AI bubble narrative. With approximately $95 billion in outstanding debt, Oracle is already the largest non-financial corporate issuer in Bloomberg's high-grade index.\n**Debt Expansion Accelerates**  \nOracle's borrowing pace is intensifying. Last month, the company raised $18 billion in corporate bonds—the second-largest high-grade deal this year. Morgan Stanley predicts Oracle's net adjusted debt could triple to about $290 billion by fiscal 2028 as AI investments grow.\n**Credit Concerns Mount**  \nAccording to ICE Data Services, Oracle's five-year CDS costs hover near 2023 peaks, signaling investor anxiety. Morgan Stanley advises buying Oracle's five-year CDS and bonds for protection, citing deteriorating credit conditions.\nNicholas Elfner of Breckinridge Capital notes that when major issuers like Oracle rapidly increase debt, it creates \"interesting secondary market dynamics\"—index trackers may overweight the bonds, while skeptics hedge with CDS.\n**AI Bubble's Stress Test**  \nWith annual AI infrastructure spending projected at $200 billion, doubts persist about returns. Some investors compare the AI frenzy to the dot-com bubble, warning of overvaluation and weak profitability.\nWhile Oracle's cloud/AI cash flows may mitigate default risks, market focus remains on the debt sustaining the AI bubble. As one observer noted: \"Even AI bubbles can't inflate forever—credit 'wings' eventually melt.\" Oracle's CDS trajectory may reveal the first fractures in this narrative.","news_type":1,"symbols_score_info":{"ORCL":1}},"isVote":1,"tweetType":1,"viewCount":142,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":30,"optionInvolvedFlag":false,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}