AI Debt Tests Tech Boom as Investors Demand Returns

Goldman Sachs estimated that Meta and four other AI hyperscalers will lift capital spending to about $1.2 trillion next year. Investors are questioning whether the companies can earn enough to sustain that build-out. The money is headed to AI infrastructure, including data centers, as financing and profitability become central market concerns.

Who Supplies the Capital

CoreWeave, an AI cloud company carrying about $50 billion in debt, saw its shares tumble during the week. The company wanted an investment-grade rating for its bonds, according to Katie Martin, the Financial Times’ markets columnist and a host of the Unhedged podcast. Martin said a senior executive had told her that such a rating could help CoreWeave tap insurance-company capital.

The Financial Times News Briefing transcript reported that Anthropic received a double-B grade from Kroll Bond Rating Agency in June, based on documents FT reporters saw. The rating hadn’t been publicly reported before and put the AI lab close to investment grade, though KBRA didn’t have full access to Anthropic’s financial information. KBRA and Anthropic declined to comment.

KBRA used an in-house credit risk score, which the transcript described as rare for a credit rating, and received only a limited set of financials. Bankers acting on Anthropic’s behalf had lobbied for an investment-grade rating after the company goes public, the transcript said. Michelle Chan, the FT’s US credit correspondent, said a rating could lower borrowing costs, help lenders assess Anthropic’s creditworthiness, and give it access to a larger pool of capital as it raises funds after an IPO.

Chan said Anthropic appeared close to investment grade under KBRA’s framework if it had a substantial cash cushion after an IPO. She also said KBRA isn’t one of the three major credit rating agencies, and other agencies might not give Anthropic as much leeway.

The Returns Question

Investors want evidence that companies pouring money into AI data centers can earn enough to keep spending at this pace. “One of the most important takeaways of earnings season is whether or not the profitability of the hyperscalers can grow faster than the pace of their capex,” said Kevin Shea, senior equity analyst at BNY Wealth.

Meta, valued at about $1.9 trillion, saw its shares climb in recent weeks after launching its Muse AI assistant. “With the cost of capital going up, this capex blowout is going to become more expensive, which raises the bar for returns,” said Chuck Carlson, chief executive officer at Horizon Investment Services. “Meta is going to be the first up to try to provide some color around that question.”

Uncertainty has spread to semiconductor and technology hardware companies. Dell Technologies and other semiconductor and technology hardware firms recorded sharp declines. The Philadelphia SE Semiconductor index fell 8% that month, but remained up more than 60% for the year, compared with a 13% year-to-date gain for the S&P 500.

Markets and the State

On October 9, Deutsche Bank strategists said the rotation into technology had “run far and the risk-reward no longer looks favorable in the near term.” Strategists at Deutsche Bank and RBC Capital Markets separately cut their recommendations on the technology sector. Even after heavyweight technology and AI shares pulled back, the S&P 500 stood about 1% below its record high set that month.

Rising Treasury yields and the chance of further Federal Reserve rate increases remained concerns for stock investors. Hot inflation data during the week fueled bets on another rate increase at the Fed’s meeting at the end of October. Futures pricing, however, showed that most investors expected the central bank to wait until its December meeting to raise rates for a second time that year. “Another strong earnings season should help equities withstand moderately higher rates,” UBS Global Wealth Management analysts said in a Thursday note.

LSEG IBES forecast that S&P 500 companies would increase third-quarter earnings by more than 30%. Meta Platforms, Lam Research and Texas Instruments were preparing to report results, alongside Tesla, Netflix, Procter & Gamble and GE Aerospace. Lam Research and Texas Instruments were due to report on Wednesday; each company’s share price had risen about 60% in 2026.

Garrett Melson, portfolio strategist with Natixis Investment Managers Solutions, called the market “a little bit jittery” and said there was “a lot of uncertainty around where AI stands right now.” He said, “When AI is working, it sucks all the oxygen out of the room for the rest of the sectors.” The AI-linked bull market marked its fourth anniversary as investors weighed earnings, borrowing and the returns on corporate spending.