Oracle’s CDS jumps more than 30 basis points in two days as the cost of borrowing to build data centers gets recalculated
Oracle shares fell more than 4% that day, while its five-year CDS jumped more than 30 basis points in two days. Deutsche Bank also singled it out in a report, and the market is repricing its ability to repay its debt. CoreWeave plunged nearly 12% again. The concern is real: data centers built up with borrowed money ultimately have to be paid for with cash flow, and a rise in financing costs can leave them gasping for air. Morgan Stanley remains bullish, saying cloud providers’ incremental computing capacity will need to grow by nearly 50% in 2027.
Oracle shares fell more than 4% that day, while its five-year CDS jumped more than 30 basis points in two days. Deutsche Bank also singled it out in a report, and the market is repricing its ability to repay its debt. CoreWeave plunged nearly 12% again. The concern is real: data centers built up with borrowed money ultimately have to be paid for with cash flow, and a rise in financing costs can leave them gasping for air. Morgan Stanley remains bullish, saying cloud providers’ incremental computing capacity will need to grow by nearly 50% in 2027.