Premium"Melting Down": Goldman Admits Its Credit Bear Case Isn't Bearish Enough As AI Stress Hits Bonds
For most of the year, the AI bubble debate was an equity story: P/E multiples, capex guides, and whether Nvidia's customers were also its investors. This week it became a credit story.
Regular readers will hardly be surprised: we have been warning since last October that AI is now a debt bubble too, and that the buildout would sooner or later collide with the one thing that can't be printed by a hyperscaler: other people's money. Well, on Wednesday the collision went from theory to price action, when Meta's earnings sent AI credit cracks wider and the stock tumbled as its CDS hit a record. We summarized the absurdity in two lines: