Overview
UBS updated its 2026 debt issuance forecasts for the technology sector, projecting stronger demand for investment grade bonds from large U.S. tech firms while reducing its expectations for leveraged loan issuance.
Revised issuance forecasts
In a note from its global credit team, UBS raised its forecast for U.S. investment grade technology issuance to $360 billion, up from a prior estimate of $300 billion. That adjustment lifts the bank's overall U.S. investment grade debt issuance forecast for the year to $1.8 trillion from $1.725 trillion, with technology expected to represent roughly one-fifth of the total.
Conversely, UBS trimmed its projection for U.S. leveraged loan issuance to $360 billion, down from an earlier forecast of $450 billion.
Drivers: big tech capex and hyperscaler funding needs
UBS tied the upward revision for investment grade issuance to announced increases in capital expenditure by several large technology companies during the recent earnings season. The note highlights that multiple megacap firms, including Meta, Amazon and Alphabet, revealed substantial capex increases.
If those announced capital plans are fully executed, UBS estimates that aggregate capex by hyperscalers could approach $770 billion in 2026, which the bank says is about 23% above its previous expectations. Increased hyperscaler spending could translate into higher public debt issuance, with UBS indicating hyperscaler issuance might rise by an extra $40 billion to $50 billion, potentially reaching as much as $240 billion.
Global funding and currency mix
UBS also expects more non-U.S. dollar supply from technology issuers compared with prior years. The bank pointed to Alphabet's recent bond transactions in sterling and Swiss franc markets as part of a $31.51 billion global bond offering, noting that such deals suggest U.S. tech companies will continue to look beyond domestic markets to fund capex.
Context: prior shift to debt markets
Late in 2025, major technology companies began turning to debt markets to finance AI data centers, prompting a broad rise in issuance across multiple debt markets. That pattern informs UBS's current outlook for 2026 issuance dynamics.
Leveraged loans and AI disruption risks
At the same time, UBS lowered its leveraged loan issuance forecast on the view that disruption from AI is most underpriced in leveraged loans and private credit markets. The bank warned that a higher perceived disruption risk could widen spreads in the leveraged loan space and impair refinancing activity, which is the primary reason for the reduced leveraged loan projection.
Market reaction and valuations
The note also observes that after years of outsized gains, big technology stocks have declined in 2026 as investors assess whether elevated AI spending will generate returns sufficient to sustain high valuations.
This article lays out UBS's updated debt issuance forecasts and the bank's reasoning, based on company capex announcements and market dynamics cited in its global credit research note.