“Oracle’s CDS Just Doubled:
Is Larry Ellison Paying for the AI Bubble? 🤯📉
When a company’s credit default swaps (CDS) suddenly double, it usually means one thing:
Investors are no longer whispering about risk —
they’re screaming it in 72-point bold. 📣🔥
That’s exactly what’s happening with Oracle.
The surge in its CDS spreads has turned these contracts into a new ‘insurance policy’ for anyone hedging against an AI unwind — and right now, demand is rising like someone discovered a leak in the hull of the AI ship. 🚢💦
Let’s talk numbers:
Oracle has slid from its US$345 peak to about US$198 — a pretty steep haircut ✂️ — yet it’s still up 20% YTD. So the question is:
Is this a normal pullback… or the start of a valuation reset for non-AI-heavy tech giants? 🤔
Because here’s the uncomfortable truth no one wants to say out loud:
Other mega-caps with debt — Meta, Microsoft, Nvidia, Amazon — are actually generating real AI revenue.
Oracle? It’s trying to catch up in AI infrastructure, but right now most of the “AI narrative” around it is still… promise-heavy, cash-light.
So when risk appetite weakens, CDS spreads widen fast.
Investors ask:
“Who’s actually earning from AI…
and who’s just standing close enough to look AI-adjacent?” 👀💻
And Oracle suddenly finds itself on the wrong side of that comparison.
⸻
💥 Will Oracle Continue to Decline?
Two paths ahead:
1️⃣ If AI sentiment stays strong:
Oracle stabilises. Maybe even climbs. Growth investors forgive almost anything during hype cycles. Just look at 2021. 😅
2️⃣ If AI confidence weakens even slightly:
CDS spreads can widen again, funding costs rise, and Oracle’s valuation — already stretched vs growth — can compress further.
Put simply: the stock becomes more sensitive to any AI disappointment than actual AI leaders. ⚡️
That’s why some investors are now whispering the question:
⸻
🧨 “Is Oracle becoming the unintended payer of the AI bubble?”
When the bill for AI excesses comes due, markets rarely charge the biggest winners.
They usually charge the ‘narrative tag-alongs’ — the companies exposed to the theme, but not central to it.
Oracle might be at risk of becoming exactly that.
While Microsoft and Nvidia mint money from AI, Oracle is issuing debt to build capability — a very different equation when rates are high and hype starts cooling.
If the AI tide pulls back, Oracle gets hit from both directions:
💸 Credit risk repriced upward (CDS widening)
📉 Equity risk repriced downward (valuation compression)
Double impact.
Double trouble.
Double CDS — literally. 😬
⸻
🔮 Final Question
Is this just market overreaction?
Or is the CDS spike signalling the start of a deeper breakdown in confidence around Oracle’s AI trajectory?
If AI bets cool further… Oracle may end up paying for optimism it hasn’t yet cashed in on.
And that might mean the real correction hasn’t even started.
What do you think —
Is Oracle oversold, or is this just the opening chapter of a much bigger rerating? 📘⚡️
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
