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Why Nvidia Has Held Up Better Than Broadcom and Oracle in the AI Debt Scare
Nvidia has held up better because forward earnings estimates rose more than 30%, nearly matching a roughly 24% P/E contraction; Broadcom’s and Oracle’s smaller upgrades did not offset their steeper multiple declines. Credit protection costs also rose for Nvidia, Broadcom and Oracle.
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Key takeaways
- Nvidia has held up better because forward earnings estimates rose more than 30%, nearly matching a roughly 24% P/E contraction; Broadcom’s and Oracle’s smaller upgrades did not offset their steeper multiple declines.
- Credit protection costs also rose for Nvidia, Broadcom and Oracle. That signals increased investor concern, not a prediction that any company will default.
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openai.comCreate a landscape editorial hero image for this Studio Global article: Why has Nvidia largely avoided the AI-debt-driven stock selloff affecting Broadcom and Oracle in early October 2026 despite rising credit-de. Article summary: Nvidia has been more resilient because stronger expected earnings have cushioned falling valuation multiples—not because it is immune to AI-credit risk. Reports indicate that its forward earnings estimates rose more than. Topic tags: general, general web, news. Style: premium digital editorial illustration, source-backed research mood, clean composition, high detail, modern web publication hero. Use reference image context only for broad subject, composition, and topical grounding; do not copy the exact image. Avoid: logos, brand marks, copyrighted characters, real person likenesses, fake screenshots, UI text, readable text, watermarks, charts with fake numbers
Nvidia’s relative resilience during the early-October 2026 AI debt scare comes down partly to earnings expectations: analysts’ forward estimates rose faster for Nvidia than for Broadcom or Oracle, helping cushion falling valuation multiples. But Nvidia’s credit-default swap (CDS) spread also widened, so its steadier share price does not mean it is immune to financing risks across the AI infrastructure market. 3
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Earnings upgrades helped cushion falling valuations
A share price can be understood roughly as expected earnings multiplied by a valuation multiple. When earnings forecasts rise, they can offset some of the pressure from a falling price-to-earnings (P/E) multiple—but the balance differed across these three companies.
MarketWatch-reported estimates showed forward earnings forecasts rising by more than 30% for Nvidia, more than 20% for Broadcom and about 14% for Oracle. Over the same June 2–October 8 period, Nvidia’s forward P/E fell from about 21 to 16, Broadcom’s from 30 to 18.7, and Oracle’s from nearly 30 to 14.5. 3
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As a rough mathematical comparison, those P/E changes amount to declines of about 24% for Nvidia, 38% for Broadcom and 52% for Oracle. That makes Nvidia’s larger earnings upgrade a much stronger cushion. Broadcom’s and Oracle’s forecast gains were smaller than their respective multiple contractions. This is an illustration of how the figures compare—not a precise breakdown of each stock’s return or a forecast of future performance.
Wider CDS spreads show credit concerns, not certain default
A five-year CDS is a form of credit protection; its spread is the price investors pay for that protection. A wider spread indicates that the market is demanding more compensation for taking on credit exposure. It does not, by itself, mean investors expect a default. 2
MarketWatch-reported figures put Nvidia’s five-year CDS spread at about 84 basis points on October 8, up from about 40 in June. Broadcom’s rose from about 41 to 132, while Oracle’s increased from about 151 to 252. 6 Other reporting cited record readings of 136 basis points for Broadcom and 261 for Oracle.
2 The reported figures vary, but they point in the same direction: credit risk was being repriced across the sector, including for Nvidia.
AI borrowing is large—and investors are reassessing the risk
Bloomberg reported that companies including Oracle, Broadcom and SpaceX had priced nearly $500 billion in debt during 2026 to finance AI infrastructure. That figure refers to borrowing across the group of companies, not to those three alone. 32
The amount of financing and the rise in credit-protection costs are not contradictory: companies can continue to raise debt even as investors demand more compensation for the risks. The repricing is also broader than any single stock. Bloomberg described heightened volatility and weaker performance in parts of the corporate debt market as investors reassessed AI-related financing. 32
Why Oracle faces particular scrutiny—and Nvidia is still exposed
Oracle’s credit profile is a focal point because its AI expansion involves substantial infrastructure spending and financing needs. S&P Global Ratings downgraded Oracle from BBB to BBB- in July 2026, citing rising business risk and weaker cash flow; BBB- is the lowest investment-grade rating on S&P’s scale. 42 Reuters also described Oracle as close to junk-grade status amid concerns about debt-funded AI spending.
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Nvidia’s relative share-price resilience does not remove its exposure to the same investment cycle. Financing supports purchases of AI infrastructure and chips; if funding becomes harder or more expensive, buyers could delay or reduce projects, which could eventually weigh on suppliers’ demand. That is a risk scenario, not an outcome established by the CDS moves. Reporting on the financing plans links borrowing to purchases of Nvidia chips, while Nvidia’s own CDS widening shows that credit-market concern has not spared the company. 5
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The key distinction is that earnings expectations have provided Nvidia with a larger valuation cushion so far. But continued reliance on debt-funded infrastructure means a broader reassessment of AI project economics could still bring more volatility to the sector.
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Nvidia has held up better because forward earnings estimates rose more than 30%, nearly matching a roughly 24% P/E contraction; Broadcom’s and Oracle’s smaller upgrades did not offset their steeper multiple declines.
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Nvidia has held up better because forward earnings estimates rose more than 30%, nearly matching a roughly 24% P/E contraction; Broadcom’s and Oracle’s smaller upgrades did not offset their steeper multiple declines. Credit protection costs also rose for Nvidia, Broadcom and Oracle. That signals increased investor concern, not a prediction that any company will default.