Alphabet Raises 2026 CapEx Guidance; Debt Investors Warn of Rising AI Risks

According to Mizuho Securities, Alphabet raised its 2026 capital expenditure guidance this week, triggering immediate concerns among bond investors about the financial risks of tech giants' accelerating AI infrastructure spending.

Corporate bond credit spreads for cloud providers including Alphabet, Meta, and Amazon have widened notably, signaling higher risk demands from fixed-income investors. Oracle's five-year credit default swaps spiked, with S&P Global downgrading the company to BBB-. Analysts note that Meta faces higher financing costs for its $12 billion Texas data center project, with interest rates rising above previous comparable projects. Mizuho projects that cloud providers' combined capital expenditure will exceed free cash flow for the first time in 2027, forcing increased reliance on external debt to fund AI infrastructure buildouts.