Derivatives tied to Nvidia Corp. are now among the most traded in the US credit default swaps market, as investors seek to hedge exposure to the firm’s debt after June’s $25 billion bond sale. Market participants traded protection on $6.9 billion of debt in the past six months, up from $640 million in the prior six, Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, told Bloomberg News, citing DTCC data.

The surge was the primary reason Nvidia was added to the latest iteration of the CDX Investment-Grade Index effective Monday. The company is among the most-liquid names in series 47, alongside Oracle Corp., Amazon.com Inc., Alphabet Inc., Broadcom Inc., Meta Platforms Inc., and Microsoft Corp.

“There’s just been a huge pickup in the trading of CDS linked to these names,” Godec said. “And with the funding that’s taking place for data centers, for example, there’s no signs that this trend is going to stop anytime soon.” Space X also joined the index this week; both companies sold $25 billion of high-grade bonds in June.

Demand for credit default swaps is coming from investors hedging against losses from hyperscaler debt. Wall Street banks are buying protection to reduce exposure, enabling more business. The cost of protecting Nvidia’s debt has doubled this year amid the borrowing binge and AI-related infrastructure deals. “For anyone looking to hedge AI-specific risk, the volumes have been incredible,” said Barclays Plc macro credit strategist Jigar Patel.