Tech IPO hype gets drowned out on Wall Street by prospect of $1 trillion in debt sales

• Tech's four hyperscalers (Microsoft, Amazon, Google, Meta) are projected to spend close to $500 billion this year on AI-related capital expenditures and finance leases
• Oracle raised $25 billion and Alphabet sold over $30 billion in debt this year, with Alphabet's offerings priced at yields only narrowly higher than Treasury rates despite the risk
• Tech concentration in investment grade debt indexes is approaching 9% and could reach mid-to-high teens, raising concerns about market contagion if AI startups like OpenAI hit growth walls

Market Summary: Tech Sector Shifts Focus from IPOs to Massive Debt Issuance

Key Developments

While speculation around a potential SpaceX IPO generates excitement, the real action in tech capital markets is occurring in debt markets. Tech and AI-related global debt issuance more than doubled to $710 billion in 2025 and could reach $990 billion by 2026, according to UBS estimates. Goldman Sachs projects a $1.5 trillion funding gap for AI buildouts.

Major Companies and Transactions

The four tech hyperscalers (Amazon, Microsoft, Google, Alphabet) are projected to spend approximately $300 billion collectively on capital expenditures and finance leases this year for AI infrastructure.

Largest debt sales include:

• Oracle: Raised $25 billion of a planned $45-50 billion
• Alphabet: Sold over $30 billion in bonds (following $25 billion in November), with yields at 3.7% for 2029 notes and 4.1% for 2031 notes
• Meta: Filed mixed shelf registration for potential debt/equity raises
• Tesla: Considering external financing options

Market Implications

Corporate bond indexes now show tech representing approximately 9% of investment grade debt, potentially reaching mid-to-high teens. This concentration creates both opportunities and risks, particularly regarding market contagion if AI startups like OpenAI and Anthropic curtail spending.

The massive debt supply is driving concerns about:

• Rising yields for other corporate borrowers
• Higher debt servicing costs across sectors (automakers, banks)
• AI bubble risks

IPO Market Status

Despite SpaceX speculation, no notable U.S. tech IPO filings have occurred in 2026. Goldman Sachs expects 120 IPOs raising $160 billion this year, up from 61 deals in 2025, though market volatility and geopolitical concerns keep companies sidelined.