Key facts
- Nvidia's 5-year credit default swap cost is approaching the level of the US sovereign CDS.
- This indicates the credit market perceives Nvidia's default risk as very low, similar to the US government.
Credit default swaps (CDS) are financial derivatives that allow investors to 'swap' or offset their credit risk with that of the defaulter. The cost of a CDS is a measure of the perceived risk of default. When a company's CDS cost approaches that of a sovereign nation, it signifies a very high level of confidence in the company's financial stability and its ability to meet its debt obligations.