Oracle(US:ORCL) Hua Er Jie Jian Wen·2025-12-15 00:47Core Insights - Concerns over potential debt risks are rising as tech giants issue significant amounts of debt for AI infrastructure projects, leading to a 90% increase in credit default swap (CDS) trading volume linked to a few major U.S. tech companies since early September [1] - The shift from internal financing to external debt issuance exposes the credit status of tech companies to public market scrutiny, with a total of $88 billion raised by Meta, Amazon, Alphabet, and Oracle for AI projects this fall [2] - Oracle has become a focal point for investors due to its lower credit rating compared to peers, with its CDS trading volume more than doubling this year and costs reaching the highest level since 2009 [4] Group 1 - The surge in CDS trading reflects a growing trend among tech companies to utilize debt markets, particularly for "hyperscaler" companies building large data centers [3] - Investors are increasingly using CDS to hedge against risks associated with specific companies, with notable trading activity in Oracle and Meta [3] - Asset management firms are betting on Oracle's credit risk, viewing the current pricing of its CDS as mispriced given its rising debt levels and reliance on a single client, OpenAI [5] Group 2 - The current market dynamics indicate a vibrant period for individual company CDS, as banks and private credit institutions seek to mitigate their exposure to single-company risks [6] - CDS are being utilized not only for default protection but also to hedge or speculate on bond price fluctuations, providing investors with flexible tools to manage risks during uncertain AI investment cycles [6]