Fidelity Director Timmer Argues AI Bubble Risk Lies in Debt Markets, Not Stock Valuations

Fidelity director of global macro Jurrien Timmer suggests that potential AI bubble risk is concentrated in debt markets rather than stock valuations, noting that yields on AI cloud provider CoreWeave’s bonds topped 15% last week, even as equity valuations fall amid growing earnings. Timmer compared current AI price action to the 1998-2000 internet boom, pointing to the sharp drawdown in high yield data center bonds. CoreWeave’s 2031 notes yielded 15.78% last Thursday, and its five-year default insurance briefly cost over 11% annually, with S&P Global rating it B+. Despite debt rising from $21 billion at the end of 2025 to $35 billion by June 30, CEO Mike Intrator stated that contract backlog near $104 billion on June 30 more than covers debt obligations.