UBS has raised its forecast for US investment-grade bond issuance by technology companies in 2026, citing accelerating capital expenditure by major tech firms, while trimming its outlook for leveraged loans amid concerns that artificial intelligence could disrupt credit markets, according to Reuters.
The bank’s global credit team pointed to rising investment by megacap technology companies such as Meta, Amazon, and Alphabet, many of which have outlined significant increases in capital expenditure during the latest earnings season as they expand AI infrastructure and data centre capacity.
At the same time, large technology stocks have come under pressure in 2026 after years of strong gains, with investors increasingly scrutinising whether heavy spending on AI will translate into adequate returns and justify elevated valuations.
According to Reuters, UBS has lifted its forecast for U.S. investment-grade tech bond issuance to about $360 billion, up from $300 billion previously. This revision pushes the bank’s overall projection for total U.S. investment-grade debt issuance this year to roughly $1.8 trillion from $1.725 trillion, with the technology sector expected to account for around one-fifth of the total.
In contrast, UBS has lowered its forecast for U.S. leveraged loan issuance to $360 billion from $450 billion, reflecting expectations that AI-driven disruption could dampen supply and affect refinancing activity in riskier credit segments.
The bank also expects capital spending by hyperscale cloud and technology companies to exceed earlier projections. If recently announced spending plans are fully implemented, aggregate capex by hyperscalers could approach $770 billion in 2026, roughly 23% higher than UBS’s previous estimate, Reuters reported.
Higher investment needs are likely to translate into increased borrowing. UBS estimates that public debt issuance by hyperscalers could rise by an additional $40 billion to $50 billion, potentially reaching as much as $240 billion.Another notable trend is the growing use of non-U.S. dollar funding by technology companies. Recent global bond activity, including issuance in currencies such as sterling and Swiss francs, suggests that large U.S. tech firms are increasingly tapping international markets to finance capital spending.
The shift toward debt financing became more pronounced in late 2025 as major technology companies turned to bond markets to fund large-scale AI data centre projects, contributing to a surge in issuance across multiple credit markets.
Meanwhile, concerns about the broader impact of advanced AI models on traditional business models have intensified in recent weeks. UBS believes disruption risk may be underappreciated in leveraged loan and private credit markets, which could lead to wider spreads and weigh on refinancing volumes.
