AI boom will lead to record bond offering in 2026 - JPMorgan

A new round of spending to fund AI investments will boost placements in the U.S. high-grade bond market to a new record of $1.81 trillion in 2026, JPMorgan credit strategists wrote in a note cited by Bloomberg, with the previous high reached in 2020 at $1.76 trillion.

The key factors that will cause companies to need to raise additional money will be the need to refinance more than $1 trillion in old debt, a resurgence in M&A, and a boom in AI capital expenditures.

Strategists predict that technology, media and telecom companies will raise about $400 billion in the high-grade debt market in 2026. Technology companies alone will increase their offerings to $252 billion - 61% more than they have borrowed since the beginning of 2025. The consumer sector is expected to increase bond issuance by 44% (to $135 billion), the media and entertainment segment by 38% (to $85 billion), and telecom borrowers will increase issuance by 25% (to $56 billion), according to the investment bank.

JPMorgan estimates that redemptions in 2026 will remain close to record levels at just above $1 trillion, almost unchanged from the current year. With bond supply in 2026 expected to be about 17% higher than what has already been issued this year and redemptions remaining stable, net new offerings will increase 54% to $802 billion, the highest since 2020, the bank says.

Bond issuance is also rising in 2025: this is partly due to more favorable borrowing costs thanks to lower Fed Funds rates, a surge in AI investment and a resurgence of takeovers, JPMorgan said.

Goldman Sachs has estimated that the volume of loans of such companies as Meta, Alphabet, Oracle and others amounted to $180 billion since the beginning of the year, the Financial Times wrote on October 31. AI-related issuance has accounted for more than a quarter of the entire net supply of U.S. corporate debt this year, the publication noted. Companies are entering the market at a time of extremely high demand, the newspaper argued.

"The huge appetite of highly-rated tech issuers for debt to fund AI investments will divert demand away from other areas of the corporate lending markets," Gordon Shannon, fund manager at TwentyFour Asset Management, told the FT.

Despite recent concerns about the sustainability of the credit market, JPMorgan's forecast joins other Wall Street analysts who also expect the trend to continue next year, Bloomberg noted. For example, Goldman Sachs analysts called 2025 "an outstanding year for AI-related net placements," and they too predict that the wave of bond sales to finance data centers and related energy infrastructure will continue into 2026, the agency wrote.

This article was AI-translated and verified by a human editor