WASHINGTON (dpa-AFX) - Bank of America has increased its 2026 forecast for investment-grade bond issuance by major cloud and AI companies to $175 billion, up 25% from prior estimates.
This reflects stronger-than-expected borrowing tied to artificial intelligence infrastructure spending.
The upward revision follows Amazon.com's $54 billion multi-currency bond offering linked to its investment in OpenAI, a transaction not included in earlier forecasts. Analysts now expect another $65 billion of issuance through the remainder of the year.
So far, hyperscalers have issued about $110 billion of investment-grade debt, representing roughly 63% of the revised forecast. Expected upcoming supply includes about $30 billion from Meta Platforms, $20 billion from Microsoft, and $15 billion from Alphabet. Approximately one-quarter of total issuance is projected to be in foreign currencies.
Amazon's recent bond sale reportedly drew about $126 billion in U.S. orders, underscoring strong investor demand even as issuance volumes rise. The borrowing surge comes as hyperscaler capital spending on data centers is projected to climb about 70% year over year to more than $600 billion, driven largely by AI infrastructure expansion.
Analysts say future debt issuance could remain elevated if spending guidance continues rising, with signals from Oracle Corporation suggesting funding needs may extend beyond 2026.
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