The five largest cloud computing companies have issued 271 billion dollars in debt since the start of 2026, exceeding Goldman Sachs’ full-year forecast; leases that have not commenced and purchase commitments will also affect future cash needs and credit ratings.
US credit spreads widened last week, while European spreads narrowed. Morgan Stanley favors US investment-grade bonds while monitoring the shift toward shorter-term AI financing and pressure on high-yield telecommunications and media debt.
The volume of AI and data center bonds tracked by JPMorgan has been broadly flat since August, while spreads on project bonds relative to those of cloud giants continue to widen. The bank expects future deals to use more equity and less leverage, reducing pressure from bond supply.
Large US actively managed credit funds have generally underperformed their benchmarks over the past month. Goldman Sachs believes the economy can still support most issuers operating normally, but spreads remain tight by historical standards. It advocates select non-AI credit and prefers dollar to euro credit assets.
Goldman Sachs believes large corporate-led acquisitions are pushing up financing demand. Cash-and-stock payments are mildly favorable to creditors, but dollar M&A bond issuance is already high and euro supply is set to rise from a low base. Despite expectations of tighter spreads by year-end, the risk of near-term widening still predominates.
