Oracle Bond Risk Jumps on Concerns Over AI Spending Spree
The Stargate AI data center under construction in Abilene, Texas, on Sept. 24.
Photographer: Kyle Grillot/BloombergCredit traders are buying protection against Oracle Corp. defaulting on its debt, a trend that Morgan Stanley sees continuing in the near term as the tech giant pours billions into artificial intelligence.
The cost to insure against default on the company debt over the next five years is hovering near its highest since Oct. 2023, according to ICE Data Services. The company’s 4.9% bonds maturing in February 2033 widened 26 basis points to 83 basis points as of 9:23 a.m. New York time, according to Trace.