Major US technology companies, including Amazon, Alphabet, Meta Platforms, and Oracle, are ramping up their borrowing as they invest heavily in artificial intelligence. According to a Reuters analysis, these companies issued around $194 billion in bonds in 2026 through July 7, a 79% increase from the $108 billion issued in all of 2025.

Higher Yields and Widening Spreads

The increased supply of bonds has led to higher yields and widening borrowing spreads over risk-free rates for these investment-grade firms. The median spread on 2- to 4-year bonds rose to 40 basis points from 30 basis points in 2025, while the median spread on 5- to 7-year debt increased to 60 basis points from 50 basis points.

Secondary-market performance has also deteriorated, with 78 of 91 hyperscaler bonds issued in 2026 trading at higher yields on July 28 than at issuance. The median increase was around 22 basis points.

Investor demand, while still strong in absolute terms, has weakened as supply has accelerated. Apollo Global Management reported that cover ratios for hyperscaler bond sales fell from nearly five times in February to below two times in July.

Impact on the Market

The hyperscalers’ debt binge is expected to continue, with Goldman Sachs forecasting bond issuance to reach around $250 billion this year and $400 billion in 2027. This is likely to put pressure on spreads and yields, making it more expensive for these companies to borrow.

The shift in investor demand is also evident in the recent bond sales of these companies. For example, Amazon’s March US-dollar bond sale was around 3.4 times oversubscribed, compared to around 1.6 times for its July offering.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.