Credit risk across the AI sector climbed to fresh highs alongside the tech equity pullback as AI-related debt issuance reached $466 billion so far in 2026, up from $101 billion at the same point in 2025. Weekly trading volume in credit default swaps tied to Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom and Nvidia quadrupled from July to $9.5 billion, while total CDS volume for the 10 largest hyperscalers and chipmakers rose 691% year over year through September to $140 billion. Five year CDS spreads reached 119.3 basis points for Meta, 241 basis points for SpaceX, 159 basis points for Broadcom and 101 basis points for Nvidia, while Oracle's topped 340 basis points to price in roughly a 24% five year default probability on $638 billion in contracted future revenue, about half of which is with OpenAI. CoreWeave's 2032 bonds fell below 80 cents on the dollar, pushing its borrowing yields above 15% and its five year CDS to 1,090 basis points, while OpenAI cut the target valuation on its planned $30 billion funding round to $1.25 trillion from $1.4 trillion.
Friday's losses extended Thursday's tech rout, when the Nasdaq 100 dropped 2.9% and erased nearly $1.2 trillion in market value after Meta reported $2.12 billion in third quarter negative free cash flow, raised the low end of its 2026 capital expenditure forecast to $135 billion, and disclosed $825 billion in future lease and contract commitments. That equity selloff had triggered a flight to safety on Thursday that drove the 10 year Treasury yield down 0.193 percentage point to 4.952%, its steepest single day decline since Silicon Valley Bank failed in March 2023, leaving the yield down 10 basis points for the week.