CoreWeave Default Insurance Cost Tops 1,100 Basis Points, Oracle Nears 300

Key Facts

CoreWeave's credit default swap spreads exceeded 1,100 basis points during the October 15, 2026 session, according to a Reuters update citing S&P Global Market Intelligence data. The pressure extended to Oracle, whose default protection spread approached 300 basis points during the same session, the agency reported. Oracle's spread widened by about 31 basis points over the week, as the cost of protection against credit risks linked to artificial intelligence investments increased. Spreads rose amid concerns about financing those investments and how quickly spending would translate into profits, according to the Reuters report. The agency linked some of the pressure to higher-than-expected U.S. inflation data and mounting expectations of higher interest rates.

CoreWeave faces these pressures with debt Reuters estimated at about $50 billion in its report published on the day of the news, covering the company's contracts and the lenders financing its expansion. The company had announced in its second-quarter 2026 earnings disclosure that it raised more than $10 billion through unsecured debt and convertible bonds. The announced financing included that unsecured borrowing alongside debt instruments convertible into equity, according to the earnings statement. Oracle raised $43 billion through debt during its fiscal year 2026, according to its earnings disclosure for that year. Oracle added that it also raised $5 billion in equity financing during the same period, combining borrowing and equity capital among its disclosed funding sources.

Against that borrowing, CoreWeave said its revenue backlog stood at about $104 billion at the end of June 2026, in results published in August. The company said the backlog excluded net new customer commitments added early in the third quarter of the same year. Those additional commitments exceeded $25 billion, according to the disclosure, outside the backlog reported at the end of June. The volume of contracts was accompanied by heavy reliance on Microsoft, which accounted for about 67% of CoreWeave's revenue in 2025, according to company disclosures cited by Reuters. Microsoft's share was 62% in 2024, reflecting increased revenue concentration with the same customer over the period covered by the disclosures, alongside an expansion in the company's financing obligations.

The credit pressure was reflected in CoreWeave's bonds during the October 15 session, as the yield on its bond maturing in 2031 rose to 16%, according to Reuters. The yield then fell to about 14% during the session, after reaching the high reported by the agency in its debt trading update. That followed a 15% drop in CoreWeave shares on Wednesday, October 14, during the selloff covered by Reuters in its report on inflation's impact on artificial intelligence stocks. But a late agency roundup of the October 15 session recorded a 6.5% gain in the shares, as stocks improved during the day after early pressure. Trading thus combined a retreat in the bond yield from its session peak with a rebound in the shares following their sharp loss the previous day, while credit protection spreads continued to widen.

Responding to the market moves, CoreWeave Chief Executive Mike Intrator described trading as "irrational" in an internal memo sent on Wednesday. Reuters cited that description from a Bloomberg report on Intrator's message to employees of the artificial intelligence cloud computing company. Intrator said in the memo that he remained confident in the company, according to the report cited by the agency on management's response to the selloff. His message came on the day of the sharp share-price decline, before the rebound recorded in the late trading roundup for the following session. Management's stated confidence coincided with financing concerns that Reuters linked to U.S. inflation, interest rate expectations and worries about how quickly artificial intelligence investments would translate into profits.

Oracle, meanwhile, reported in a September disclosure that revenue for the first quarter of its fiscal year 2027 rose 30% to $19.3 billion, as investment in cloud infrastructure continued. The company recorded negative free cash flow of $5 billion in the same quarter, according to its earnings statement, alongside that investment. The reported quarterly performance thus combined revenue growth with continued negative free cash flow at the start of the company's new fiscal year. For the second quarter of fiscal year 2027, Oracle forecast total revenue growth of between 30% and 34%, according to the guidance in the disclosure. It said the expected growth range applied to revenue in both U.S. dollars and constant currencies, setting out its outlook for the next period after reporting first-quarter results.