Credit risk gauges for some of the biggest names in technology climbed to new highs on October 20, 2026. Investors are worried that a fresh wave of bond sales is coming, and that the market may struggle to absorb it.
What the credit markets are signaling
The clearest warning sign comes from credit default swaps, or CDS. Think of a CDS as an insurance policy on a company’s debt. If the borrower defaults, the policyholder gets paid. When investors grow nervous, the cost of that insurance rises.
Oracle now carries an implied five-year default probability of over 20%. SpaceX’s sits at approximately 16%.
CoreWeave, the AI cloud provider, shows even more strain. Its CDS has traded above 1,100 basis points, a level that signals distress. For a sense of scale, that means protecting debt against a CoreWeave default costs more than 11% of the insured amount per year.
Tech credit ranks among the worst-performing sectors in the market. It has also seen significant volatility, with trading volumes in both bonds and derivatives running elevated.
The borrowing binge behind the fear
Firms including Oracle, Broadcom, and SpaceX have collectively issued nearly $500 billion in new debt in 2026 to finance AI infrastructure. Combined capital expenditure across these companies is anticipated to exceed $1 trillion from 2025 to 2026.
Broadcom alone may require about $600 billion in funding for its AI-related expenditures over the next few years. If that number holds, one company’s needs would exceed the entire group’s borrowing so far this year.
Why this moment matters
There is also a ratings dimension. S&P Global has issued an alert about under-recognized AI-linked liabilities. That raises the possibility that some obligations tied to the AI buildout are not fully reflected in how companies are currently assessed.
Several companies are already predicted to report negative free cash flows well into 2027, which compounds concerns about their ability to manage escalating debt levels effectively.
What this means for investors and the sector
The pain is unlikely to be evenly distributed. The current data already shows a spread of outcomes, from Oracle’s elevated implied default probability to CoreWeave’s distressed-level CDS.
Earnings from key players such as Meta Platforms and SpaceX could prove pivotal. Investors watching the sector have a few things to track: the pace of new bond issuance, CDS levels for Oracle, SpaceX, and CoreWeave, and any rating actions following S&P Global’s warning.
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.