Alphabet Tests Investors' Faith in AI with New Eurobond Offering — Bloomberg

Google’s parent company, Alphabet, is raising funds on the euro bond market for the second time this year, offering a significantly higher yield than in its previous offering, Bloomberg reports, citing a source. The company launched the new offering after concerns about the pace of AI spending triggered a sell-off in the bond market. Alphabet’s own earnings report was among the factors that caused the sell-off.

Alphabet has opened a book-building process for a bond offering consisting of seven tranches with maturities ranging from two to 19 years, a Bloomberg source said. According to the source, the company is offering yields approximately 60 basis points above the market benchmark for two-year bonds and 205–210 basis points above the benchmark for 19-year bonds. According to Bloomberg’s calculations, this translates to an average premium of 45 basis points across the entire issue. The wider spreads reflect the decline in prices of Alphabet’s existing Eurobonds, the agency notes.

The offering will total at least €3.5 billion, according to Bloomberg. According to Bloomberg, this would make Alphabet the largest corporate issuer of Eurobonds for the calendar year—taking into account the €9 billion issuance in May. So far, the record is held by Amazon, which raised €14.5 billion in March.

Barclays, BNP Paribas, and Deutsche Bank are acting as underwriters for the offering. The final terms are expected to be determined later on Monday.

Alphabet shares rose 1.5% in premarket trading on November 2—along with other tech stocks. Following Friday’s sell-off and ahead of Apple’s quarterly earnings report, Nasdaq-100 futures gained about 1%.

Amid the race to invest in AI, Alphabet and other hyperscalers are issuing debt at a record pace, even as market participants increasingly question whether these massive investments will pay off. Alphabet’s earnings report last week showed just how high the stakes are: its market capitalization plummeted by a record $500 billion in a single day due to disappointing sales in its search and advertising businesses.

On Friday, the cost of default insurance for Alphabet surged at the fastest pace on record, reaching a historic high of nearly 91 basis points.

A similar situation is being observed among other tech giants. This year, credit default swap spreads are widening more sharply than the broader market average: traders are using them to hedge against the risk that AI—the debt market’s main theme—will fail to live up to the hype, Bloomberg notes.

“Spreads continue to widen, and they keep issuing debt,” Brin Jones, head of fixed-income at Rathbones Group, told the agency. “Before we start investing more aggressively in this sector, I need to see a return on capital employed or a slowdown in debt issuance.”

Large-scale AI-related borrowing helped push global bond issuance to a record high in 2026: According to the agency, nearly $500 billion was raised for data centers, chips, and other AI projects—compared to approximately $200 billion for all of 2025. And big tech companies are expected to continue actively raising funds, Bloomberg reports. Last week, Alphabet confirmed its capital expenditure forecast for the current year at up to $205 billion. Combined, Alphabet, Meta, Microsoft, Amazon, and Oracle have committed to spending more than $3 trillion in the coming years, Bloomberg notes.

Last week, Microsoft returned to the bond market, sparking a rush of demand. Bids for its bonds totaled $115 billion, exceeding the offering size by 4.6 times, Bloomberg reported, citing sources. According to the agency’s data, this was one of the most sought-after corporate debt offerings in the U.S. in recorded history.

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