Hyperscaler Debt Issuance Rises Toward 1 Trillion Dollar Mark

Hyperscalers increased their investment grade debt issuance by approximately 35% over the last year, now accounting for 30% of all net investment grade issuance year-to-date. Market forecasts predict a further 40% rise next year, which could push the total to 1 trillion dollars.

Investors continue to purchase high-quality debt from these companies but have adopted a more cautious approach. This shift follows recent underperformance and sector indigestion. Analysts suggest that investors now require a cross-asset view of AI exposure because financing is distributed across public and private credit, asset-backed markets, and commercial mortgage-backed securities.

While the investment grade sector grows, the high-yield market shows signs of stress. This weakness is most evident in the triple-C rated cohort, driven primarily by declines in the cable and software sectors.