Apollo Global Management has warned about rising credit risks for major hyperscalers, citing high leverage and uncertain returns from artificial intelligence investments. The companies affected by this assessment include Amazon, Google, Apple, Microsoft, and Oracle.
Credit default swaps for these technology firms have exceeded 100 basis points, indicating an increase in perceived default risk. Furthermore, most bonds issued by these companies in 2026 are trading at wider spreads than their initial pricing, which may lead to higher financing costs.
Market participants are expressing concerns regarding the long-term sustainability of AI-related expenditures. Some investors are considering a shift toward safer assets like gold, although current prediction markets show only a 14.5% probability of gold reaching $15,000 by December 2026.
Analysts are now focusing on the ability of these technology giants to manage their leverage and generate returns on AI capital. Future market sentiment will depend on bond pricing patterns, central bank policies, and potential changes in the broader economic landscape.
