Big Tech’s AI spending clouds the earnings picture
A gauge of the risk in holding these firms’ debt has climbed to record highs, the Financial Times reported, citing LSEG data, with credit default swaps tied to Oracle, Alphabet, Amazon, Meta, Broadcom, Nvidia and SpaceX all touching records in recent days.
Oracle’s five-year swaps traded at 215 basis points on Monday, up from 144 at the start of the year, per the same data, meaning investors now pay US$215,000 a year to insure US$10m of its debt against default.
“For hyperscalers, watch CDS, not EPS,” Manish Kabra, head of US equity strategy at Société Générale, said, using shorthand for credit default swaps and earnings per share.
Investors delivered split verdicts on the earnings.
CNBC reported that Microsoft climbed 15 percent on Thursday, its strongest session since 2008, adding close to US$450bn in market value even after holding its 2026 capital spending forecast steady.
