Oracle’s credit risk hits a record as the market fears debt from the company’s AI bet

Oracle's credit risk hit an all-time high: insurance against default on its debt became more expensive than even during the 2008 crisis peak. For the market, this is a sign that the company's multibillion-dollar AI expansion looks increasingly risky, despite rapid growth in its cloud business.

Why the market is nervous

On March 27, 2026, the cost of a five-year default insurance on Oracle's debt rose 7.2 basis points and closed at 198.18 basis points.

This is higher than the previous peak in December 2008. Such an indicator does not mean the market expects immediate problems for the company, but it shows: investors are demanding an ever-larger risk premium when it comes to Oracle's debt securities. Nervousness intensified against the backdrop of rising oil prices and stock declines, making attitudes toward capital-intensive AI bets even harsher.

In essence, Oracle's CDS has become an indicator of how Wall Street assesses the debt side of the AI boom. The more expensive this protection, the stronger the doubts that the company will quickly turn massive investments in data centers, GPUs, and new capacity into a sustainable cash flow. Investors are no longer arguing about whether there is demand for AI infrastructure, but about how safe it is to finance this race with debt and how many years the market is willing to wait for payback.

Where Oracle's burden came from

Oracle itself chose an aggressive growth scenario. In February 2026, the company announced plans to raise $45-50 billion through debt and equity over the calendar year to expand Oracle Cloud Infrastructure to meet already-contracted demand from major clients. This involves large-scale projects for AMD, Meta, NVIDIA, OpenAI, TikTok, xAI, and other customers. Within days of the announcement, Oracle had already raised $30 billion through investment-grade bonds and mandatory convertible preferred securities.

• 2026 funding plan: $45–50 billion
• Already raised: $30 billion
• Portfolio of contractual commitments: $553 billion, up 325% year-over-year
• Oracle's capex forecast for FY2026: $50 billion

The problem is that the market sees not only future revenue but also the scale of obligations here and now. Oracle explains that for new AI contracts, it won't need additional funding: clients make advance payments for equipment or supply GPUs themselves. Management has also stated that it does not expect new bond issuances beyond the plan already announced for 2026. But even these clarifications haven't yet answered the question: will the company's current financing scheme be enough if deployment of capacity, demand, and margins don't move exactly to plan?

Growth is there, trust is less

From an operational perspective, Oracle's picture doesn't look weak. In Q3 FY2026, the company's revenue grew 22% to $17.2 billion, cloud revenue—44% to $8.

9 billion, and IaaS infrastructure—84% to $4.9 billion. The portfolio of future contractual obligations reached $553 billion, and the company raised its revenue guidance for FY2027 to $90 billion.

In other words, the market sees demand for Oracle's capacity. But the credit market is now looking at the other side of the story. Until future contracts and forecasts turn into actual cash flow already received, investors continue to factor in a premium for high debt, expensive infrastructure, and a long payback horizon.

This is why even strong operating metrics don't prevent default insurance from setting new records. For Oracle, this is already not just a question of business growth, but a question of confidence in how exactly this growth is financed.

What this means

Oracle's story shows that in 2026, the market evaluates the AI race not only by revenue and number of contracts, but by the cost of capital. If even a company the scale of Oracle gets record-expensive default insurance, it means investors are beginning to scrutinize more strictly the entire thesis that huge spending on AI infrastructure will automatically pay for itself.