The Credit Market's Warning On Big Tech Spending Grows Louder

Corporate bond yields and credit spreads are rising as capex surges, signaling a shift in risk pricing. Widening spreads, especially in capex-heavy tech names like Oracle, Nvidia, Dell, and Meta, may pressure equity valuation multiples. Oracle's CDS now implies a 16% default probability, up sharply from 3.5% last September, reflecting increased market caution. While spreads remain historically low, continued repricing could force equity investors to adjust to lower valuation multiples.