🚨AI CREDIT STRESS IS DIVERGING SHARPLY FROM STOCK PRICES: Hyperscaler credit spreads have widened to 153.5 bps over Treasuries, up from ~118 bps in February, the widest since Goldman Sachs launched this basket. Meanwhile, the hyperscaler equity basket has gained just ~3% over the same period, highlighting a growing divergence between equity and credit market sentiment. A credit spread measures the extra yield investors demand to hold a company's bonds over Treasuries. A wider spread means investors require more compensation for risk and to absorb the new bond supply. At the same time, the cover ratio for hyperscaler bond deals, which measures investor demand relative to the amount of bonds issued, has fallen from ~5x in February to below 2x in July. This comes as hyperscalers are expected to spend a combined ~$5.5 trillion on AI capex through FY2030, with roughly half likely financed through investment-grade bond markets. This would require the IG bond market to absorb ~3.5% of additional net issuance every year, close to the ~3.1% average inflow cushion the USD market has had over the past 3 years, leaving little room for error if Fed rates rise or credit demand weakens. Credit markets have historically been the first to sniff out trouble well before stocks catch on, and if this stress keeps building, equity investors betting on the AI trade may eventually feel the fallout too.