Live Markets: Hyperscaler credit spreads signal caution, not alarm

Oracle

23/07/2026 12:24

Adds new blog entry
STOXX 600 slips 0.7%
Oil rises as Iran conflict escalates
Traders brace for hawkish ECB signals
Alphabet falls on spending plans
Wall Street futures lower
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
     

HYPERSCALER CREDIT SPREADS SIGNAL CAUTION, NOT ALARM
Investors looking for early signs of artificial intelligence fatigue may be finding them in the bond market.
Credit spreads on bonds issued by so-called hyperscalers such as Amazon AMZN.O, Microsoft MSFT.O, Alphabet GOOGL.O and Meta META.O have widened over the past year, raising questions about whether debt investors are growing more wary of the sector's huge AI spending plans.
UniCredit says the signal should not be overstated.
Average hyperscaler bond spreads have roughly doubled to above 110 basis points this month from below 60 bps mid-2025, but much of the move is down to Oracle ORCL.N. 
Stripping Oracle off, spreads have also widened, but remain below the average of all U.S. corporate bonds, reflecting strong cash generation, balance sheets and AA-category credit ratings.
The scrutiny comes as capex is projected to reach $758 billion this year and $925 billion in 2027, more than double 2025 levels. Investors are looking for firmer evidence that AI investment will be properly monetised.
The Italian bank argues technical factors are also at work.
Hyperscalers have already issued $114 billion of bonds year-to-date, exceeding the $82 billion raised in all of 2025, while investor demand for new deals has softened.
The growing use of private equity, private credit and off-balance-sheet funding structures for AI infrastructure adds another layer of uncertainty, it adds.
To conclude, UniCredit strategist Michael Teig says: "We do not view the recent spread widening as a reason for major concern about the AI narrative, but rather as a reflection of higher issuance volumes and a more-cautious investor stance as investors await evidence that AI capex is translating into stronger revenue growth."

(Danilo Masoni)
***** 

     
EARLIER ON LIVE MARKETS: 
THE ATM LESSON: AI'S LABOUR SHOCK? VANGUARD SAYS NOT YET CLICK HERE
ALPHABET SPENDING PLANS BODE WELL FOR EUROPEAN ELECTRICALS CLICK HERE
STOXX DOWN ON OIL HIT AS EARNINGS ROLL IN CLICK HERE
EUROPE BEFORE THE BELL: FUTURES SIGNAL SOFTER OPEN AS OIL JUMPS CLICK HERE
CAN MARKETS HANDLE MORE STRAIT TALK? CLICK HERE 

HYPERSCALER CREDIT SPREADS  UniCredit https://tmsnrt.rs/4wWFKlG