UBS has raised its 2026 forecast for U.S. tech investment-grade bond sales, projecting $360 billion in issuance, up from $300 billion. This revision is driven by substantial increases in capital expenditure plans announced by major tech firms like Meta, Amazon, and Alphabet.
These "hyperscaler" companies are poised to increase their aggregate capital spending significantly. UBS now anticipates this spending to approach $770 billion for 2026, a 23% increase over previous estimates. Consequently, public debt issuance from hyperscalers could rise by an additional $40 billion to $50 billion, potentially reaching $240 billion.
Simultaneously, UBS has lowered its forecast for U.S. leveraged loan issuance to $360 billion from $450 billion. This adjustment stems from expectations that AI-related disruption could curb supply and potentially widen spreads in the leveraged loan market, impacting refinancing activities.
Tech companies are increasingly tapping global debt markets to fund AI data centers. Alphabet's recent issuance in sterling and Swiss franc markets highlights this trend, suggesting continued international funding efforts by U.S. tech firms.