AI-related stocks rebounded Monday on Wall Street, with the Nasdaq gaining 1%. However, CoreWeave, the cloud company that led last week’s selloff, finished slightly lower. Creditor concerns persist: the yield on its 9.625% bonds maturing in 2032 stands at 14.9%, while its five-year credit default swaps show a spread of 1,082 basis points, signaling financial distress. Oracle, seen as a barometer for AI credit, sees its five-year CDS spread reach 315 basis points, up 311% year-over-year. Oracle, with 132 billion dollars in net debt and a BBB- rating from S&P, risks being downgraded to junk status, which would signal contagion in the markets.
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