The “money-burning” effect of AI spreads: North American tech giant CDS soared across the board in July, and risk compensation requirements in the credit market increased significantly

The Zhitong Finance App learned that Everbright Securities released a research report saying that recently, North American tech giants' credit default swaps (CDS) have rapidly expanded, causing the market to pay attention to high capital investment and financing sustainability in AI infrastructure. Overall, the current data mainly shows three characteristics: first, the North American tech giant CDS has generally broadened since July, and the North American market is increasing the pricing of credit risk for related companies; second, there is a clear differentiation in bond issuance costs for different companies, and interest spreads for Amazon's July bond issuance widened slightly compared to March; third, the capital expenditure of North American tech giants is expected to continue to increase in '26, but the year-on-year growth rate may slow down in '27. The above changes indicate that the market is paying more attention to return on investment, cash flow coverage, and financing arrangements, and that the credit market's risk compensation requirements for AI high-capital investment models are increasing. In the future, it is still necessary to continue to observe the CDS, credit spreads, capital expenditure pace, and AI business cash flow disbursement.

Incident: Recently, North American tech giants have rapidly expanded credit default swaps (CDS), drawing market attention to high capital investment and financing sustainability in AI infrastructure. CDS reflects the costs investors need to pay to hedge against corporate credit risk. This increase means that the credit risk compensation required by the market has increased. We have compiled the 5-year CDS trends of companies such as Microsoft, Amazon, Alphabet, Meta, Oracle, Nvidia, and SpaceX, and observed changes in risk pricing for related companies in the credit market based on the growth rate of capital expenditure of major North American technology giants and the cost of issuing bonds for about 10 years since this year.

The North American tech giant's 5-year CDS has generally shown a clear upward trend since July. From the beginning of 2025 to the first half of 2026, with the exception of Oracle, most companies' CDS was in the 30-60 bp range; after entering July 2026, the CDS of various companies expanded to varying degrees. Among them, Oracle's latest CDS rose to over 200 bp, SpaceX rose to about 180 bps, Meta, Broadcom, and Nvidia rapidly rose to 75-100 bps, and Alphabet, Amazon, and Microsoft's CDS rose simultaneously. The rise in credit risk pricing has expanded from individual companies to a number of core companies in the AI industry chain, reflecting recent heightened concerns about related corporate risks in the North American bond market. It is worth noting that on July 30, the CDS of the companies mentioned above showed a slight decline.

The 10-year bond financing rate range for tech giants is 4.83% — 5.90%, and the issuance spread is 50-145 bps. Nvidia and Alphabet issued the lowest spreads, 50 bp and 63 bps, respectively, while Oracle, SpaceX, and Salesforce issued the highest spreads, reaching 145 bps, 140 bps, and 135 bps, respectively. The issuance yield and issuance spread of different companies are affected by factors such as credit ratings, balance sheet quality, time of issuance, bond terms, and market supply and demand. Horizontal differences more reflect the different credit qualifications and risk pricing of each enterprise.

The cost of Amazon's July bond issuance was slightly higher than in March. The yield on the 10-year bonds issued by Amazon in March 2026 was 4.90%, and the issuance spread was 75 bps; the yield on the 10-year bonds issued in July rose to 5.34%, and the issuance spread rose to 80 bps. Between the two issuances, the issuance yield increased by about 44 bps, and the credit spread widened by 5 bps, indicating that the change in absolute financing costs was mainly affected by changes in the benchmark US bond interest rate during the same period, and credit risk compensation showed a slight increase.

The capital expenditure of North American tech giants is still expanding rapidly. Since 2024, the overall capital expenditure of Microsoft, Amazon, Google, Meta and Oracle has accelerated markedly, and the combined capital expenditure growth of the five companies in 2026 is expected to accelerate further. High-intensity AI infrastructure investment continues to support demand in industrial chains such as computing power, networks, and data centers, while also making the market pay more attention to the return cycle, cash flow coverage capacity, and subsequent financing arrangements for related investments.