Investor Chamath Palihapitiya highlighted Oracle Corp.’s (NYSE:ORCL) surging credit default swaps, hinting at growing unease in credit markets over the debt-fueled AI infrastructure push. CDS Rates Surge Past COVID-19 Levels On Tuesday, in a post on X, Palihapitiya shared a chart showing Oracle’s CDS had surged to 160 basis points, which reflects the rising annual cost of insuring the company’s debt against default. Palihapitiya just said “gulp” in his post, while pointing out that the company’s CDS spr ...

Investor Chamath Palihapitiya highlighted Oracle Corp.’s (NYSE:ORCL) surging credit default swaps, hinting at growing unease in credit markets over the debt-fueled AI infrastructure push.CDS Rates Surge Past COVID-19 LevelsOn Tuesday, in a post on X, Palihapitiya shared a chart showing Oracle’s CDS had surged to 160 basis points, which reflects the rising annual cost of insuring the company’s debt against default. Palihapitiya just said “gulp” in his post, while pointing out that the company’s CDS spreads h ...

Let's get to see Modi for more on the widening bond yields for Oracle and some of these other hyperscalers which appears to be hurting the stock. >> Yeah, and it's clear Sarah that the market is becoming just more aware of how these hyperscalers are spending money especially when it comes to debt as it pertains to Oracle. The key question is whether the company can raise mountains of new debt while holding on to its investment grade credit rating currently at tripleB the lowest of all the hyperscalers.Last ...

The cost of insuring Oracle's debt against the risk of default has shot up after its latest earnings reignited worries about how much the broader corporate sector is spending on AI and the borrowing s... ...

Core Viewpoint - Oracle is positioned at the forefront of the artificial intelligence boom, but concerns about its rising debt and potential risks in the AI market are growing among investors [2]. Group 1: Financial Performance Expectations - Analysts expect Oracle's revenue to increase by 15% in the fiscal second quarter, reaching approximately $16.21 billion, up from $14.1 billion a year earlier [1][8]. - Cloud revenue is anticipated to be around $7.92 billion, while software revenue is expected to be approximately $6.06 billion [1]. Group 2: Market Position and Competition - Over the past decade, Oracle has diversified into cloud infrastructure, competing with major players like Amazon, Microsoft, and Google, all of whom are heavily investing in AI-related data centers and hardware [4]. - OpenAI has committed to spending over $300 billion on Oracle's infrastructure services over the next five years, highlighting Oracle's role in the AI sector [5]. Group 3: Stock Performance and Investor Sentiment - Oracle's stock experienced a significant decline of 23% in November, marking its worst monthly performance since 2001, and is currently 33% below its record high from September [3]. - Despite the recent downturn, Oracle's shares are up 33% for the year, outperforming the Nasdaq's 22% gain during the same period [3]. Group 4: Debt and Risk Concerns - Oracle raised $18 billion during the recent period, one of the largest issuances for a tech company, leading to increased investor skepticism reflected in the rising prices of five-year credit default swaps [6]. - Analysts express concerns about customer concentration and the company's ability to manage its debt, with RBC analyst Rishi Jaluria questioning how Oracle will finance its growth [7].

Core Viewpoint - Oracle has experienced a significant decline in stock value, down 22% month-to-date, raising concerns about its credit and future financial commitments [1][2][5]. Company Analysis - Morgan Stanley has reiterated that risks for Oracle's credit are skewed to the downside, suggesting that the issues affecting Oracle are persistent and not likely to resolve soon [2][3]. - The credit team at Morgan Stanley is now recommending investors to go long on Oracle's credit default swaps (CDS) while removing the buy bond leg of their previous trade strategy [3][4]. - Analysts are questioning Oracle's ability to meet its estimated $90 billion debt commitments over the next three years without reassurance from OpenAI regarding a significant $300 billion deal [6]. Market Sentiment - There has been a shift in sentiment among bondholders due to the emergence of large-scale bond deals, which provide alternative investment options, leading to increased concerns about Oracle's stock [4][5]. - The upcoming earnings call for Oracle, expected the week of December 8th, is anticipated to provide clarity on the company's financing plans and future debt commitments [5]. Industry Context - The software sector is facing challenges, with the software ETF experiencing its worst month since January 2022, influenced by the performance of several key companies, including Oracle [10]. - In contrast, other companies in the cybersecurity space, such as Zscaler, are being viewed more favorably, with significant growth reported despite the overall downturn in the software sector [12][13].

Uncertainty over the rules governing the payout of credit default swaps has sown confusion among traders https://t.co/RLUkeqGwOq ...

Market Overview - The crypto market is experiencing a risk-off session, with Bitcoin (BTC) down 3.5% in the past 24 hours, nearing October lows around $103,600, potentially marking its lowest price since June [1] - The CoinDesk 20 Index has decreased by 5%, with major altcoins like ether (ETH) and solana (SOL) also reaching their lowest levels since August [1] Contributing Factors - Hawkish comments from Fed Chair Jerome Powell, a strengthening dollar index, and persistent selling from long-time wallets are blamed for the market downturn [2] - Market maker Wintermute noted that while global liquidity is expanding, capital is not flowing into crypto, with ETF inflows stalling and only stablecoins showing growth [2] - The bearish sentiment may also be linked to the October 17 flash crash, where several arbitrage bets lost money, leading firms to potentially liquidate long spot positions, adding downward pressure on prices [2] Specific Incidents - Stream Finance's stablecoin, xUSD, collapsed by 80% to 30 cents, resulting in a reported $93 million loss due to issues with an external fund manager [3] - The investigation into the xUSD collapse has raised concerns within the crypto community about broader market implications [3] - Lenders of xUSD are reportedly earning over 500% daily interest, indicating potential trouble for the protocol's treasury [3] Market Trends - Despite the overall market decline, some privacy coins like Zcash, Decred, and DASH have surged by as much as 200% in just 24 hours, suggesting traders are seeking refuge in these assets [4] Traditional Market Insights - In traditional markets, a rise in credit default swaps tied to Oracle reflects investor concerns over the company's significant AI-related spending [5] - The dollar index has reached 100 for the first time in months, complicating the outlook for Bitcoin bulls [5] - Gold prices remain steady around $4,000 per ounce [5]

A panel overseeing the credit default swaps market is asking for external help to decide whether a recent debt deal between Ardagh and its creditors should trigger a payout of the insurance https://t.co/mBYNWKBQwV ...

分组1: Michael Burry and Scion Asset Management - Michael Burry gained recognition for betting against the housing market before the Great Recession, purchasing credit default swaps on mortgage bonds that paid out significantly [1] - In early 2023, Scion Asset Management sold nearly its entire portfolio and bought put options on large tech and AI stocks like Nvidia, which proved to be a timely decision as the stock market faced a downturn [2] - Scion's Q2 13F filing indicated a shift in strategy, with Burry becoming a significant buyer of stocks that had declined at least 40% this year [3] 分组2: UnitedHealth - UnitedHealth, the largest healthcare insurer in the U.S., has faced a challenging year, with its stock down nearly 41% as of August 20, primarily due to underestimated medical costs projected to be $6.5 billion higher than expected for 2025 [5][6] - The company revised its adjusted earnings per share (EPS) guidance for 2025 down to $16 from an initial estimate of $29.50 to $30 [6] - Despite challenges, hedge funds including Scion purchased shares in Q2, with Burry acquiring about 20,000 shares and 350,000 shares through long call options [7] - UnitedHealth maintains significant pricing power and generated enough earnings to manage debt payments, with a free cash flow yield over 9% and a dividend yield close to 3% [8] 分组3: Lululemon - Lululemon's stock has declined nearly 47% this year due to rising competition, tariffs, cautious consumer spending, and a slowdown in the exercise market post-COVID-19 [9] - Despite the stock's decline, Burry and Scion purchased 50,000 shares in Q2 and a total of 400,000 shares through long call options [10] - Lululemon reported EPS and revenue exceeding Wall Street estimates in its first fiscal quarter of 2025, but management lowered its full-year EPS guidance to $14.58 to $14.78 from $14.95 to $15.15 [11] - The company has a strong financial position with $1.3 billion in cash and no debt, and plans modest price increases to address tariff impacts, suggesting potential long-term opportunities despite near-term challenges [11]