FINV

Anyone who has co-signed a loan for a friend knows how the story can end. When the payments stop, the bank calls you.

Nvidia Corp. (NASDAQ:NVDA) has co-signed a lot of loans. It owns a stake in CoreWeave Inc. (NASDAQ:CRWV).

It has promised to buy computing capacity the neocloud cannot sell. It also guarantees part of the data center leases signed by its AI cloud partners.

Now credit traders are pricing the phone call.

The cost of protecting against an Nvidia default has more than tripled this year.

Last week, it rose above Meta Platforms Inc. (NASDAQ:META), one of the chipmaker’s biggest customers, for the first time since at least November 2025, according to S&P Global Market Intelligence data shared with Benzinga.

Nvidia’s Credit Risk Now Tops Meta’s

Nvidia’s five-year credit default swap (CDS), the annual cost of insuring its debt against default, stood at 127 basis points on Tuesday, up 226% from 39 at the end of 2025.

On Oct. 21, it edged above Meta’s.

Moreover, it now trades at about twice the CDX North American Investment Grade index and above all six of the largest U.S. banks tracked by S&P Global.

Month-end	Nvidia	Meta	CoreWeave	CDX North American Investment Grade
November 2025	40	58	699	51
December 2025	39	55	764	50
January 2026	39	56	622	49
February 2026	44	61	662	56
March 2026	46	70	670	63
April 2026	43	75	553	54
May 2026	40	71	475	51
June 2026	48	71	550	51
July 2026	74	91	824	53
August 2026	82	93	792	50
September 2026	86	100	843	60
Oct. 26, 2026	127	119	1,148	63

The Co-Signer Is Moving With the Borrower

CoreWeave’s CDS climbed from 589 basis points on July 1 to 967 on July 29. Nvidia’s spread peaked the same day, at 82.

The pattern repeated this month.

Between Oct. 12 and Oct. 22, CoreWeave’s CDS jumped from 903 to a record 1,167 basis points. Nvidia’s rose from 87 to 118, before hitting 130 the next day.

Over the past year, their correlation is 0.80, the tightest among large tech names, ahead of Oracle Corp. (NYSE:ORCL) at 0.69.

How Nvidia Ended Up Co-Signing the AI Buildout

First, Nvidia is a shareholder.

In January, it bought $2 billion of CoreWeave stock at $87.20 per share, according to a CoreWeave filing.

Second, Nvidia stands behind CoreWeave’s revenue. Under a September 2025 order worth an initial $6.3 billion, it must buy capacity CoreWeave cannot sell to other customers through April 2032.

Third, the guarantees go beyond CoreWeave.

In its latest quarterly report, Nvidia said it “entered into land, power, and shell guarantees for select AI cloud partners’ data center lease obligations in the event of their default.”

Beth Kindig, lead tech analyst at I/O Fund, described the loop in June.

“As Nvidia makes these investments, CoreWeave and Nebius are going right back to Nvidia to purchase large volumes of GPUs,” she said.

As a result, if demand for computing power fades, the bill comes back to Nvidia.

On Tuesday, Nvidia added another signature. It said it will invest $3 billion in Meta’s roughly $37.5 billion equity offering.

The Credit Market Is Picking Sides

Nvidia’s bonds tell the same story. Its 4.95% notes due 2036 now yield about 96 basis points more than the 10-year Treasury, up from about 73 in late September.

Still, the stress is not spreading: the CDX North American High Yield index has barely moved in a month.

Ed Yardeni and Elias Griepentrog of Yardeni Research said in a Monday note that mega-cap tech balance sheets are still treated almost like sovereign borrowers.

For the leveraged builders of AI infrastructure, however, “the credit market is increasingly imposing credit discipline,” they said.

Nvidia sits between the two groups. Its own balance sheet belongs in the first. Its signatures increasingly tie it to the second.

At 127 basis points, Nvidia’s CDS is far from distressed levels, and neither Nvidia nor CoreWeave has missed a payment. However, the credit market has started to price the co-signer as if the phone might ring.

Photo: Samuel Boivin on Shutterstock.com