Is the Debasement Trade a Vote of No Confidence in the Federal Reserve?
Ben Hunt, Co-founder, President Perscient
Geoff Phipps, CFA, Portfolio Manager and Trading Strategist PICTON Investments
Is Big Tech Quietly Reshaping the Long End of the Bond Market?
Sam Acton, CFA, Portfolio Manager, Co-Head Fixed Income
When thinking about what is driving this credit cycle, inflation and interest rates usually come to mind first. However, increasingly, the more interesting answer sits in the borrowing habits of the world's largest technology companies.
Amazon.com Inc., Alphabet Inc., Meta Platforms, Inc., Microsoft Corporation, Oracle Corporation, NVIDIA Corporation, and SpaceX, the companies known collectively as hyperscalers, make up only about 4% of the investment grade bond index. Yet over the past twelve months, this group has accounted for 13% of all investment grade issuance. The imbalance becomes even more pronounced once maturity enters the picture.
Hyperscaler bonds maturing in zero to three years represent 7% of investment-grade issuance in that bucket. That share climbs to 9% for three-to-six-year bonds, 11% for six-to-ten-year bonds, and a striking 19% among bonds maturing in ten years or more. Nearly one in five long-duration investment-grade dollars raised over the past year came from a handful of technology issuers. We believe this concentrated supply is absorbing demand that would otherwise likely have flowed toward long-duration government bonds.
Of the roughly 90 hyperscaler bonds issued to market in 2026, a large share now trading at meaningfully wider spreads, with each new jumbo deal requiring a bigger concession to clear the market. We view this largely as a function of how much supply is arriving, rather than any deterioration in fundamentals. Leverage across these issuers remains well below the broader investment grade average.
We do not currently own hyperscaler bonds. However, if spreads continue to widen as AI-related capital expenditure keeps climbing, 2027 and 2028 could bring attractive entry points into what we view as durable, high-quality credit hiding behind a temporary supply problem.
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SUBMIT YOUR QUESTIONBen Hunt, Co-founder, President Perscient
Geoff Phipps, CFA, Portfolio Manager and Trading Strategist PICTON Investments
Rob Poole, CFA, Co-Head Equity Strategies, Head of Fundamental Equity Research
Rob Poole, CFA, Co-Head Equity Strategies, Head of Fundamental Equity Research
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All data sourced from Picton Mahoney Asset Management Research unless otherwise cited.
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