Fitch Ratings reports that major US hyperscalers, including Alphabet, Amazon, Meta, and Microsoft, plan to increase capital expenditure by over 75% in 2026, reaching approximately $700 billion. The agency projects that annual spending by these companies could exceed $1 trillion between 2027 and 2029.
The report highlights that IT capital investment contributed 1.4 percentage points to US GDP growth in the first quarter of 2026. During the first half of the year, corporate bond issuance increased by 26%, with six major issuers raising $182 billion, largely driven by AI-related projects.
Fitch warns that rising corporate valuations and debt levels resemble the dotcom bubble of the late 1990s. The agency notes a decline in pricing power for AI models due to intensifying competition among developers and increased price sensitivity among enterprise customers.
Geopolitical tensions in the Middle East and tighter financing conditions are identified as significant risks. Fitch reports that the corporate outlook for Gulf Cooperation Council firms has been deteriorating since June 2026, with companies facing higher supply chain costs and limited access to debt.
Stress tests conducted by the agency indicate that while most sectors remain resilient, the semiconductor and data-center financing industries face higher risks, scoring 60 on the Fitch over-investment scale. A potential reduction in capital expenditure could negatively impact counterparties in related industries.
