AI Infrastructure Credit Stress & Bubble Concerns
CoreWeave's credit default swaps have hit 1000bp as AI infrastructure debt stress spreads, with Goldman Sachs warning calm credit conditions may last only two more months.
What we know
An account on X highlights CoreWeave CDS at 1000bp and spreading stress among neocloud players with long debt and short contracts. Another account on X cites Goldman Sachs saying credit is calm 'for about two more months' before the AI CapEx machine must restart. Meanwhile another account on X pushes back on Jefferies' note that cheap Chinese open-source AI will destroy US AI capital, arguing Chinese citizens are smuggling 5090 GPUs into China as evidence of continued US AI dominance. Elon Musk notes demand for AI data centers is real but execution is the bottleneck.
How the story developed
CoreWeave's credit default swaps have hit 1000bp as AI infrastructure debt stress spreads, with Goldman Sachs warning calm credit conditions may last only two more months.
Paul Tudor Jones told CNBC he will be short stocks for the entire year, warning 2027 will be "really, really challenging" with the most negative equity flow picture since 2002. Separately, Goldman Sachs shares reversed from +4.1% to negative after posting blowout equity trading revenues but disappointing FICC results; JPMorgan also turned negative.
JPMorgan and Goldman Sachs led Q3 bank earnings with profit jumps, but Jamie Dimon used the call to warn regulators about AI agents accessing bank accounts — and announced JPM is banning all outside AI agents from its systems.
Goldman Sachs massively beat estimates with EPS of $17.01 vs $13.02 expected, driven by a 72% YoY surge in equities revenue. JPMorgan had a mixed quarter with FICC missing badly, though it raised NII guidance; Citigroup also beat on revenue and EPS.
Goldman Sachs upgraded equities to overweight on a 3-month horizon and bonds to overweight on a 12-month horizon, citing nearly 30% YoY S&P 500 earnings growth and limited recession risk — even as its Risk Appetite Indicator has fallen to zero over the past two weeks.
Goldman Sachs upgraded equities to overweight over three months and bonds to overweight over twelve months, citing improving valuations, resilient earnings, and easing inflation into 2027. Macro clients are still rattled by the speed of the recent bond rout.
Goldman Sachs is flagging Italy as the next fiscal domino after France, with multiple commentators highlighting Europe's deepening debt crisis and potential bond market instability.
By the Global Eye 24 desk, with AI assistance. Updated as the story develops. Spot an error? Write to corrections@globaleye24.com.