Overview
UBS has adjusted its projections for corporate debt markets in 2026, increasing its forecast for U.S. investment-grade issuance from large technology firms and lowering its expectation for leveraged loan supply. The revisions reflect announced capital expenditure increases by several megacap tech companies and a reassessment of disruption risks tied to artificial intelligence across credit markets.
Updated issuance forecasts
In a note from its global credit team, UBS raised its forecast for U.S. investment-grade technology issuance to $360 billion for 2026, up from a prior estimate of $300 billion. That upward revision lifts the bank's overall U.S. investment-grade debt issuance forecast to $1.8 trillion from $1.725 trillion, with technology now expected to represent about one-fifth of that total.
Concurrently, UBS reduced its projection for U.S. leveraged loan issuance to $360 billion from an earlier $450 billion forecast. The bank attributes this cut to evolving assessments of how AI-related disruption could affect supply in leveraged loan and private credit markets.
Drivers: hyperscaler capex and global funding
Several large technology companies including Meta, Amazon and Alphabet have publicly announced substantial increases to capital expenditure plans during the most recent earnings season. UBS says that if those capex commitments are realized, aggregate capex among the so-called hyperscalers could approach $770 billion in 2026, a figure roughly 23% higher than the bank's previous expectations.
UBS estimates that public debt issuance by hyperscalers could rise by an additional $40 billion to $50 billion, potentially reaching as much as $240 billion. The firm also expects a greater share of tech-sector issuance to occur outside the U.S. dollar this year. As an example, UBS cited a recent transaction in which Alphabet issued bonds in sterling and Swiss francs as part of a $31.51 billion global offering.
Context: past issuance and market concerns
Late 2025 saw a notable shift by large technology firms toward tapping debt markets to finance AI data center investments, a move that produced a surge in issuance across various debt markets. However, in 2026 stock performance among big tech names has softened as investors weigh whether heavy AI spending will deliver returns sufficient to justify high valuations.
UBS signaled that concerns about how advanced AI models could disrupt established business models have recently become more prominent in markets. The bank believes the leveraged loan and private credit markets may be where disruption risk is most underpriced, and it warned that a rise in perceived disruption could lead to wider spreads and weigh on refinancing activity in the leveraged loan space.
Implications
The bank's revisions point to increased demand for investment-grade funding from tech companies and a more cautious outlook for leveraged credit issuance. The shift toward more non-U.S. dollar supply in tech bond markets and potential volatility in leveraged lending underscore changing funding patterns as capex plans and AI-related risk assessments evolve.
Note: The projections and company actions described above reflect UBS's forecasts and the capital expenditure announcements referenced by UBS; they are presented here without endorsement and strictly as reported by the bank.