AI investors rush to buy insurance against a fall in the AI trade
Demand for puts and credit-default swaps on tech giants and neoclouds is rising, after Nasdaq's worst month since March 2025, WSJ reports.
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what happened
According to WSJ, Wall Street has placed a multitrillion-dollar wager on artificial intelligence, and some investors now want protection in case it unravels. Stephen Solaka of Gateway Investment Advisers said demand for downside protection is significant. The unease shows up in the yields lenders demand for data-center financing, and in sharp selloffs of Alphabet and Intel shares. The Nasdaq fell 2.9% on Friday, its worst month since March 2025.
Volume in put options on CoreWeave hit a record in October. The cost of protection against default on debt of Amazon, Alphabet, Microsoft, Meta and Oracle widened to the highest since 2021, according to Solve, with Oracle credit-default spreads up by more than 1 percentage point. Jump Trading has launched a desk for computing power, while Susquehanna has seen interest from data centers and neoclouds in compute-linked derivatives.
why it matters
For markets, this shows participants are willing to pay for insurance as expectations for AI come under pressure. Rental prices for Nvidia B300 chips have risen about 56% this year to $7.56 an hour, per a Silicon Data index, underscoring how strong demand has been.
market impact
US tech stocks: rising hedging demand weighs on AI shares and the Nasdaq
- Nasdaq pressure down — rising demand for downside protection signals nervousness about AI stocks
- CoreWeave pressure down — expensive bonds and rising put volume reflect concerns over the company's debt
instruments
sources
- AI Investors Are Racing to Get Insurance on the Biggest Market Bet in History — WSJ, 1 November 2026 at 15:23 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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