Later in the week, markets stabilized as a series of announcements reassured investors that AI demand and strategic relevance remain strong, even as financing pressures persist.
‍

Oracle shares rebounded after the company confirmed binding agreements to lead a new U.S. joint venture for TikTok. The deal gives Oracle a central role in securing TikTok’s U.S. data, operating its cloud infrastructure, and overseeing algorithm governance under a majority-American ownership structure. That announcement removed a long-running regulatory overhang and reinforced Oracle’s importance as a trusted infrastructure partner for large, sensitive platforms.
‍

At roughly the same time, CoreWeave announced that it had joined the federal government’s “Genesis Mission,” a major U.S. initiative designed to accelerate scientific discovery, energy innovation, and national security through artificial intelligence.
‍

These headlines helped ease near-term anxiety in thin holiday markets. But they addressed demand and strategic relevance, not the growing question of how AI infrastructure is being financed.

‍

What the Genesis Mission Is

‍

The Genesis Mission was established by executive order earlier this fall and is best understood as a coordinated national effort to embed AI into the core of U.S. scientific and energy research.
‍

At its core, the program aims to:
‍

• Link Department of Energy national laboratories, federal supercomputers, and decades of government research data
• Provide researchers with large-scale AI computing power
• Shorten timelines for breakthroughs in areas like energy, materials science, manufacturing, health, and national security
  ‍

Rather than building everything in-house, the government is partnering with private companies that already operate advanced AI infrastructure. Firms like CoreWeave, Nvidia, Microsoft, Amazon, Google, and others are contributing cloud platforms, hardware, and technical expertise to support these workloads.
‍

For companies like CoreWeave, participation signals:
‍

• Long-term relevance to national priorities
• Potentially steady demand from public-sector and research customers
• Deeper integration into government and defense-adjacent projects
  ‍

In short, the Genesis Mission strengthens the strategic case for AI infrastructure and reinforces that the U.S. government views advanced computing as essential to economic and national security goals.

‍

Why Credit Markets Are Still Cautious

‍

Even with policy support and strong demand signals, credit markets are becoming more cautious about how AI infrastructure is being financed — especially for companies operating at massive scale.
‍

The chart below shows CoreWeave’s credit default swap (CDS) spread, which measures how much investors are paying to insure against the company defaulting on its debt. As that line has risen, it indicates that lenders believe CoreWeave’s risk of default is increasing.
‍

The concern is straightforward:
‍

• AI data centers require enormous upfront spending
• Much of the revenue arrives years in the future
• That creates a gap between cash going out today and cash coming in later
  ‍

Even companies with strong customer demand, government partnerships, and strategic importance are not immune to that timing mismatch. The market is not questioning whether AI will be used or whether these platforms are valuable. It is questioning how much debt the system can safely support while the infrastructure is still being built.
‍

AI is moving from a story about growth potential into a capital-intensive construction phase, where financing terms, leverage, and cash-flow timing matter far more.
‍

That tension — long-term demand versus near-term financing pressure — is what investors are now grappling with as the year comes to a close.

‍

‍

What This Means for Positioning
‍

The message from markets isn’t “AI is over.” It’s that balance sheets and financing discipline now matter as the cycle matures. That calls for a more selective, barbell-style approach.

‍

Be Careful With Leverage-Heavy AI Infrastructure

‍

• Oracle (ORCL) and CoreWeave (CRWV) remain strategically important, but rising default risk and tighter credit conditions make them tradeable, not foundational positions here.
• These are names to trim into strength, hedge, or wait for better entry points, not chase after rebounds driven by thin liquidity.

‍

Prefer AI Exposure With Cleaner Balance Sheets

‍

• AI beneficiaries with stronger cash generation and less financing risk remain the higher-quality way to stay involved in the theme:
  • NVIDIA (NVDA)
  • Microsoft (MSFT)
  • Amazon (AMZN)
    These firms benefit from AI demand without relying on aggressive, debt-heavy infrastructure buildouts to survive.

‍

Barbell With Yield, Dividends, and Real Assets

‍

If inflation continues to cool and yields drift lower, income and duration regain relevance — especially as equity sentiment runs hot.
‍

• High-dividend and dividend-growth stocks offer ballast if volatility returns. This is where tracking recent dividend increases matters most — companies raising payouts are signaling confidence in cash flow.
  • Utilities & defensives: NextEra Energy (NEE), Duke Energy (DUK)
  • Energy & cash-flow names: Exxon Mobil (XOM), Chevron (CVX)
  • Industrials with pricing power: Caterpillar (CAT)
  Investors can directly monitor Dividend Increase signals to identify which companies are actively returning more capital as conditions shift.
• Real assets and commodities remain effective hedges if financing stress reappears:
  • Copper & materials: Freeport-McMoRan (FCX)
  • Uranium / energy security: Cameco (CCJ)

Respect the Setup

‍

With record inflows into passive equity ETFs like Vanguard S&P 500 ETF (VOO) and iShares Core S&P 500 ETF (IVV), sentiment is elevated. That favors buying pullbacks, not chasing upside — especially in names tied to heavy capital spending.
‍

‍