Oracles default risk is surging as its 5-year CDS jumps to 128 bps, the highest since the financial crisis. Credit traders are buying protection amid AI-driven debt fears. Oracle stock is down 46% in three months after a 191% rally and now rebounds from $185–$198.3 support. Key resistance stands at $213.4–$213.8, with upside targets at $246.85, $290, and $346.

Oracle default fears explode as Credit Default Swap hits crisis-level highs amid AI bubble panic

Oracle's Default Risk Jumps to Crisis-Era Highs Amid AI Boom Uncertainty

Oracle's 5-year Credit Default Swap (CDS) has surged to 128 basis points, its highest level since the 2008 financial crisis, as traders buy protection against a potential Oracle debt default. The tech giant's stock has plummeted 46% in three months following a historic 191% rally earlier this year.

Why is Oracle's Default Risk Rising?

The spike in Oracle's CDS is primarily driven by its aggressive AI infrastructure borrowing, which is projected to triple its net debt to $290 billion by 2028. This is in stark contrast to its peers, Microsoft and Google, which fund expansions via cash flows and maintain stronger balance sheets with lower leverage.

Key Factors Contributing to Oracle's Default Risk

Aggressive AI Infrastructure Borrowing: Oracle's massive debt tied to its AI and cloud expansion is a major concern for investors.
New Bond Issuances: The company's reliance on new bond issuances, such as the $38 billion raised for U.S. data centers, is amplifying default fears amid high interest rates and uncertain AI returns.
High Leverage: Oracle's leverage is significantly higher than its peers, Microsoft and Google, which are self-funded and maintain stronger balance sheets.

What's Next for Oracle's Stock?

The stock has bounced off a key support zone between $185 and $198.30, but traders are watching whether the rebound can build enough momentum to challenge the next resistance levels. A confirmed breakout above the 50-week EMA around $213.4 could push the stock toward $246.85, $290, and eventually the $346 all-time high.

Technical Analysis

Monthly Chart: The long-term trend remains intact, with EMAs showing a bullish golden crossover. However, momentum is weakening, and the MACD histogram has turned negative.
Weekly Indicators: The EMAs remain in a golden cross, signaling medium-term strength. However, the MACD is bearishly crossed, and the histogram has been falling for weeks.
Daily Chart: The daily MACD has crossed bullishly, with the histogram rising. EMAs also hold a golden crossover, and the RSI has returned from oversold territory.