Key facts
- Amazon, Alphabet, Meta Platforms, and Oracle issued approximately $194 billion in bonds through July 7, a 79% increase from the previous year.
- Goldman Sachs forecasts bond issuance by five hyperscalers to reach $250 billion in 2026 and $400 billion in 2027.
- Median spreads on 2- to 4-year bonds for these companies rose to 40 basis points from 30 basis points.
- 78 out of 91 hyperscaler bonds issued in 2026 were trading at higher yields on July 28 than at issuance.
- Cover ratios for hyperscaler bond sales fell from nearly five times in February to below two times in July.
- Amazon's July offering was about 1.6 times oversubscribed, compared to 3.4 times for its March sale.
- Hyperscalers' combined U.S. dollar debt footprint has exceeded $360 billion.
Major U.S. technology companies are significantly increasing their borrowing to finance substantial investments in artificial intelligence infrastructure. This surge in debt issuance, totaling approximately $194 billion for Amazon, Alphabet, Meta Platforms, and Oracle by July 7, represents a 79% jump from the previous year. Goldman Sachs anticipates this trend to continue, projecting issuance to reach $250 billion in 2026 and $400 billion in 2027.
This increased supply of bonds has led to a cooling of investor demand and a widening of borrowing spreads over risk-free rates for these investment-grade companies. For instance, the median spread on 2- to 4-year bonds for Amazon, Alphabet, Meta, and Oracle rose to 40 basis points from 30 basis points in 2025. Similarly, spreads on longer-term debt have also increased.
Secondary market performance reflects this shift, with a majority of hyperscaler bonds issued in 2026 trading at higher yields than at issuance. Cover ratios for these bond sales have fallen from nearly five times in February to below two times in July, indicating reduced investor appetite. Amazon's recent bond offerings have seen significantly lower oversubscription rates compared to earlier deals.
Analysts suggest that the massive scale of these investments, coupled with market saturation and issuer concentration, is pressuring spreads wider. The combined U.S. dollar debt footprint of these hyperscalers has more than doubled since September, exceeding $360 billion. This trend is expected to continue, with Goldman Sachs forecasting capital expenditures to reach $750 billion in 2026, with debt issuance accounting for about one-third of that spending.