Analysis Report: Big Tech's $88B AI Debt Surge (Sept-Nov 2025)

Between September and November 2025, four major AI hyperscalers—Oracle (ORCL), Meta Platforms (META), Alphabet (GOOGL), and Amazon (AMZN)—issued a combined

to fund artificial intelligence (AI) infrastructure investments. This total exceeds the $66 billion these companies issued over the prior three years combined [1][3]. Microsoft (MSFT) was the only member of the “Big Five” to not tap the debt market during this period [3]. The debt issuance is part of a broader $121 billion in 2025 AI-related debt, driven by aggressive capex plans: Meta aims to spend $70–$72 billion on AI in 2025, Alphabet raised its AI expenditure forecast to $85 billion, and Oracle increased its fiscal 2026 capex guidance to $35 billion [2][5].

:
[1] Chosun.com, “Big Tech Firms Issue Record Bonds for AI Investments” (2025.11.24)
[2] Livemint, “Google, Meta, Amazon, Microsoft and Oracle issued $121 billion in debt to fund AI bets” (2025.11.20)
[3] Reuters via Investing.com, “Analysis-Jitters over AI spending set to grow as US tech giants flood bond market” (2025.11.21)

• Bond Spreads
  : Corporate bond spreads for AI hyperscalers widened significantly: Oracle (+48 basis points), Meta (+15 bps), and Alphabet (+10 bps) between September 1 and November 14, 2025—underperforming the broader investment-grade (IG) index [2].
• Stock Performance
  : Oracle’s stock dipped 5.66% (recent) amid credit concerns, though it remains up
  44.5% year-to-date (YTD)
  due to AI cloud growth [2][7]. Other hyperscalers saw mixed YTD returns as of August 29: Meta (+26.2%), Microsoft (+20.2%), Alphabet (+12.5%), Amazon (+4.4%) [8].

• Increased Debt Supply
  : Bank of America projects
  $100 billion in AI-related debt issuance in 2026
  as companies continue to fund data center expansions [2].
• Credit Risk
  : Oracle’s credit outlook was downgraded to
  negative
  by both S&P Global Ratings (BBB rating) and Moody’s Investors Service (Baa2 rating)—one notch above junk status—due to strained cash flow from AI capex [4][5].

• Bullish
  : Alphabet’s strong free cash flow (FCF) ($24.5 billion in Q3 2025, $73.6 billion trailing 12 months) and $98.5 billion in cash reserves mitigate debt concerns [6].
• Bearish
  : Oracle’s aggressive debt issuance and negative credit outlook raise concerns about its ability to service debt amid rising capex [4][5].

:
[2] Livemint (2025.11.20)
[4] LinkedIn Post by Stephen Klein (2025)
[5] S&P Global Ratings, “Oracle Inc. Outlook Revised To Negative On Weakening Cash Flow” (2025.09.24)
[6] Yahoo Finance, “Alphabet Inc (GOOG) Q3 2025 Earnings Call Highlights” (2025)
[7] Zacks Analyst Blog (2025.11.12)
[8] Bankrate (2025.08.29)

Metric	Value	Source
Oracle Debt Issuance (Sept 2025)	$18B	[3]
Meta Debt Issuance (Oct 2025)	$30B	[3]
Alphabet Debt Issuance (Nov 2025)	$25B	[3]
Amazon Debt Issuance (Nov 2025)	$15B	[3]
Oracle S&P Rating	BBB (Negative Outlook)	[5]
Oracle Moody’s Rating	Baa2 (Negative Outlook)	[4]
Alphabet Q3 2025 FCF	$24.5B	[6]
Alphabet Cash Reserves (Q3 2025)	$98.5B	[6]
Oracle YTD 2025 Return	+44.5%	[7]

1. Directly Impacted Stocks
   : ORCL, META, GOOGL, AMZN, MSFT (indirect via sector sentiment).
2. Sectors
   : Cloud computing, AI infrastructure, data centers.
3. Upstream
   : Semiconductors (e.g., NVIDIA, Taiwan Semiconductor) and data center equipment providers.
4. Downstream
   : AI software companies relying on hyperscaler infrastructure.

• Use of Proceeds
  : Detailed breakdown of how each company will allocate debt funds (beyond “AI capex”).
• Bond Covenants
  : Terms of debt agreements (e.g., interest coverage ratios, collateral).
• Long-Term AI Profitability
  : Evidence of sustainable returns from AI infrastructure investments.

• Debt vs Equity
  : Companies prefer debt due to lower cost (interest deductibility) vs equity (dilution), though Oracle’s near-junk rating increases borrowing costs [1][4].
• AI Bubble Debate
  : Private AI companies have median EV/Revenue multiples of
  23.6x
  (2025), raising concerns about overvaluation—though public hyperscalers have more diversified revenue streams [9].

• Oracle’s quarterly FCF and leverage ratios (to assess credit risk).
• Bond spreads for AI hyperscalers (indicator of market sentiment).
• AI valuation trends (e.g., EV/Revenue multiples for private and public firms).

1. Oracle Credit Risk
   :
   “Users should be aware that Oracle’s negative credit outlook and near-junk rating may significantly impact its borrowing costs and stock performance if cash flow does not improve.”

2. AI Bubble Risk
   :
   “This development raises concerns about the growing AI investment bubble, as high valuation multiples (median 23.6x for private AI firms) and debt-fueled capex could lead to a correction if returns underperform expectations.”

3. Bond Market Liquidity Risk
   :
   “Historical patterns suggest that a deluge of AI-related debt supply may widen spreads further, increasing borrowing costs for all companies in the sector—users should factor this into their analysis.”

: [4][5][9]

[1] Chosun.com. “Big Tech Firms Issue Record Bonds for AI Investments.” 2025.11.24. URL: https://www.chosun.com/english/market-money-en/2025/11/24/BDQN2H2V3FGSBA72I6IDMC5OIM/
[2] Livemint. “Google, Meta, Amazon, Microsoft and Oracle issued $121 billion in debt to fund AI bets.” 2025.11.20. URL: https://www.livemint.com/companies/news/google-meta-amazon-microsoft-and-oracle-issued-121-billion-in-debt-to-fund-ai-bets-4x-than-usual-report-11763647421194.html
[3] Reuters via Investing.com. “Analysis-Jitters over AI spending set to grow as US tech giants flood bond market.” 2025.11.21. URL: https://www.investing.com/news/economy-news/analysisjitters-over-ai-spending-set-to-grow-as-us-tech-giants-flood-bond-market-4372435
[4] LinkedIn Post by Stephen Klein. “Oracle’s Credit Outlook Has Been Quietly Cut to Negative.” 2025. URL: https://www.linkedin.com/posts/stephenbklein_oracles-credit-outlook-has-been-quietly-activity-7394445560944029697-4rdL
[5] S&P Global Ratings. “Oracle Inc. Outlook Revised To Negative On Weakening Cash Flow.” 2025.09.24. URL: https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3446571
[6] Yahoo Finance. “Alphabet Inc (GOOG) Q3 2025 Earnings Call Highlights.” 2025. URL: https://finance.yahoo.com/news/alphabet-inc-goog-q3-2025-200645398.html
[7] Zacks Analyst Blog. “Oracle Rises +44.5% YTD on Cloud Strength.” 2025.11.12. URL: https://www.zacks.com/stock/news/2789689/the-zacks-analyst-blog-highlights-oracle-amazon-microsoft-and-alphabet
[8] Bankrate. “Best-performing stocks: November 2025.” 2025.08.29. URL: https://www.bankrate.com/investing/best-performing-stocks/
[9] Aventis Advisors. “AI Valuation Multiples - Aventis Advisors.” 2025.03. URL: https://aventis-advisors.com/wp-content/uploads/2025/03/AI-Valuation-Multiples-2025.pdf

This report provides factual analysis and does not constitute investment advice. Users should conduct independent research before making decisions.