Amid growing concerns in the credit markets regarding the artificial intelligence sector, Nvidia shares have demonstrated remarkable resilience, contrasting sharply with significant declines in the stocks of competitors Broadcom and Oracle. While credit-default swap (CDS) spreads have widened across several major AI companies—a metric typically indicating increased perceived credit risk—the equity markets have reacted with marked divergence.
According to an analysis published by MarketWatch on October 10, 2026, this disconnect is particularly notable given the financial health of these tech giants. Usually, widening CDS spreads prompt investors to reassess valuation multiples. For instance, from early June through early October, Nvidia’s forward price-to-earnings (P/E) ratio contracted from approximately 21 to 16, while its five-year CDS spread nearly doubled from 40 to 84 basis points. Despite these unfavorable credit signals, Nvidia’s stock price has held steady.
In contrast, Broadcom and Oracle have faced severe market penalties. Broadcom’s P/E ratio fell from 30 to 18.7 over the same period, accompanied by a tripling of its CDS spread to roughly 132 basis points. Consequently, Broadcom’s stock dropped about 25%. Oracle experienced even steeper declines, with its stock falling more than 40%, its P/E ratio shrinking to 14.5 from nearly 30, and its CDS spread widening significantly to 252 basis points from 151.
The primary factor shielding Nvidia appears to be the strength of its forward earnings estimates. Analyst projections for Nvidia’s earnings over the next 12 months have risen by more than 30%, climbing from $10.48 to $14.18 per share. This robust growth in expected profits has offset the compression in valuation multiples. Broadcom saw a more modest increase of just over 20% in its estimates, while Oracle’s estimates grew by only about 14%.
Michael Kramer, founder of Mott Capital Management and the author of the analysis, noted that the trend extends beyond these specific companies to other hyperscalers like Meta, whose CDS spreads have also widened despite its stock trading near all-time highs. Kramer suggested that while investors may worry about surging capital expenditures pressuring free cash flow, the risk potentially cascades to suppliers if hyperscalers cut back spending. However, the current market behavior indicates that Nvidia’s earnings trajectory is providing a buffer that its peers currently lack.
The divergence suggests two potential future scenarios: if credit anxieties subside, P/E ratios for these companies could expand, leading to stock price recovery. Conversely, if forward earnings estimates weaken, all three companies could face further downward pressure, regardless of their current credit standings.
Let’s see how long Nvidia stays immune when hyperscalers inevitably cut CapEx. Credit risks don’t just vanish quietly.
Broadcom and Oracle took a beating while Nvidia held steady. This divergence really highlights the power of the current earnings narrative.
Interesting how hyperscaler spending is still driving Nvidia even as credit markets get nervous. The disconnect is fascinating.
Oracle at 14.5 forward P/E? That seems like an absolute bargain if they maintain their AI momentum.
Nvidia’s earnings buffer is real, but no stock climbs forever. Don’t ignore those widening CDS spreads entirely.