Investors and trading firms are exploring ways to limit exposure to AI-linked stocks, corporate debt and computing prices as a technology sell-off brings financing costs and uncertain returns into focus.
The Nasdaq Composite dropped 747.73 points, or 2.9%, to 25,437.00 on Friday, Oct. 30, during a broad technology sell-off, the Associated Press reported.
Some put contracts tied to CoreWeave shares that drew attention were set to expire in 2028 and carried $35 strike prices, the Wall Street Journal reported. Cboe’s delayed quote page listed CoreWeave shares at $55.16 at 3:59:59 p.m. ET on Oct. 30.
The Journal, citing data provider Solve, reported that protection costs for Amazon, Alphabet, Microsoft, Meta and Oracle rose over the month to their highest levels since 2021. Oracle’s spread widened by more than one percentage point. Reuters reported on Oct. 15 that five-year credit-default swaps on CoreWeave had topped 1,100 basis points and Oracle’s had reached a record 288 basis points at the time, citing S&P Global Market Intelligence and LSEG data.
A credit-default swap gives a buyer protection against a specified credit event involving a borrower. J.P. Morgan said wider spreads may reflect stronger demand for hedges, new debt or uncertainty about financing; a wider spread by itself does not predict a default. The bank linked concerns around AI-related credit to borrowing for data centers, chips and power, as well as questions about when those investments will generate profits.
Trading firms are also developing contracts tied to computing capacity. Bloomberg reported on Oct. 16 that Jump Trading had assembled a team to work on compute-linked deals, including over-the-counter contracts, perpetual futures and prediction bets. The Journal separately reported that Jump was structuring over-the-counter derivatives that could protect against falling compute prices and assessing the creditworthiness of potential counterparties. Data-center operators and investors may use hedges to limit exposure, while firms taking the other side assume contractual and counterparty risks.
The Journal also reported that Susquehanna International Group had fielded interest from data centers and privately held neoclouds seeking ways to offset their exposure to semiconductor chips.
Questions about AI returns have also weighed on software shares. CNBC connected ServiceNow shares falling after the company raised its 2026 outlook with investors’ demand for clearer evidence that AI spending can produce returns.
Jump Trading President Dave Olsen told the Journal, “You don’t need to be bearish to want some insurance.”
