Broadcom and Oracle Credit Default Swap Spreads Have Risen

The cost to hedge against default has reached record highs for both companies as AI-related debt borrowing grows.

Updated on Oct. 10, 2026 in Corporate Finance

Isometric editorial illustration of massive concrete structural pillars in a data center corridor, representing corporate infrastructure debt. — Credit default swap spreads for Broadcom and Oracle reached record highs in October 2026, driven by intense debt-funded investment in AI infrastructure. AI Illustration. Upload story photo >

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Credit default swap spreads for Broadcom and Oracle have reached record levels in October 2026. The increase reflects rising costs for traders hedging against potential default as both companies leverage debt to finance AI infrastructure.

Why it matters

Investors are signaling increased risk as major tech firms borrow heavily to fund the expansion of artificial intelligence capabilities. With projected AI-related borrowing reaching $500 billion for 2026, the credit markets are reacting to the substantial capital requirements of this sector.

Broadcom hit a record 136 basis points for five-year credit default swaps, while Oracle reached 261 basis points. Oracle has also experienced a 35% decline in its stock price year-to-date.

The players

Broadcom

Broadcom is a global technology company that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions.

Oracle

Oracle is a multinational computer technology corporation that provides database software and technology, cloud engineered systems, and enterprise software products.

Nvidia

Nvidia is a prominent technology company known for designing graphics processing units and hardware for the artificial intelligence industry.

The details

Broadcom and Oracle have taken on significant debt to build and finance the necessary infrastructure for the current AI push. While these two companies face record hedging costs, Nvidia has maintained a more stable spread between 80 and 87 basis points since July 2026.

In July 2026, Nvidia, Meta, and Alphabet saw their credit default swap spreads hit record levels.
During 2026, total AI-related borrowing across the industry is expected to reach $500 billion.
In October 2026, credit default swap spreads for Broadcom and Oracle reached their record highs.

Market Dynamics

The surge in default hedging costs for Broadcom and Oracle aligns with the broader industry trend of record debt issuance to meet the $500 billion in AI-related infrastructure borrowing for 2026. This trend marks a shift toward highly leveraged capital structures for tech firms.

Investors holding or considering shares in highly leveraged tech companies should monitor credit spread volatility as a signal of institutional risk. These shifts in the bond and swap markets can precede broader adjustments in equity valuations and dividend sustainability for tech firms.

The takeaway

The rising costs to hedge against default for major tech players serve as a critical indicator of the financial strain associated with rapid AI infrastructure expansion. Investors should remain cautious of companies carrying high debt loads in an environment where interest costs and credit risks are escalating.