Oracle faces credit pressure: debt doubled in two years toward $200 billion for AI data-center and OpenAI buildout; credit default swaps hit a record 288 basis points and 2032 bond yields repriced to 7.24%. Fundamentals are unchanged, but the speaker is suspicious as bond markets don't move for no reason.

There are concerns about rising bond prices for companies such as Oracle and CoreWave.

Two prime examples of companies that have contributed to the recent market crashes are Coreweave and Oracle.

Yes. So, the thing with Korev, as with Oracle in fact, but Korev is much smaller than Oracle right now, is that we are seeing a continuous backlog of requests.

Oracle actually has much more debt, but the market seems likely to still have many questions given Gorif’s outstanding performance so far. Perhaps two or three quarters ago, the company had a minor problem, but it was resolved quickly.

The beauty of earnings season is that, hopefully, we get answers to those questions. But right now, everything seems to be going in the wrong direction. However, as far as we know, nothing has changed .

But if we look at the bond market, we are suspicious because things don't go wrong in this market for no reason.

In the stock market, we may see some exaggerated reactions , but investors usually have information that we are unaware of. This information may become clear during the earnings report and conference call, but so far, frankly, we do n't know anything because all the other companies in this field are following the same approach.

Well, I'd also like to talk a little about Oracle and what's going on there. I mean, the credit concerns we're seeing aren't limited to startups specializing in new cloud computing.

We also see Oracle under considerable pressure right now, and as anyone who has followed the company's journey knows, it has gone through several phases of developing its business model.

It has primarily worked on reshaping its corporate identity around the field of artificial intelligence. It has forged huge partnerships in infrastructure and computing expansion with core model developers such as OpenAI.

Of course, to build the massive, energy-intensive data centers that Oracle needs to complete these partnerships, its long-term debt burden has effectively doubled in two consecutive years. It is heading towards $200 billion.

Yesterday, while recording this video, we also noticed the widening impact of the Corewave crisis, and the idea of increased risks to Oracle's debt structure emerged .

The cost of protecting Oracle's debt from default, measured via 5-year credit default swaps, rose by 26 basis points overnight to a record high of 288 basis points.

This means that institutional investors are demanding higher premiums to protect themselves against any credit event. Returning to the corporate bonds for 2032, their yields have been repriced upwards to 7.24%.

Therefore, there is still inflation and pressure on financing costs.