AI Hyperscaler Bond Index Yields 6.51%, Posts Negative 9.05% One-Year Return

A five-company index tracking dollar-denominated bonds from major AI hyperscalers had a 6.51% yield at Sept. 30, while its one-year total return was negative 9.05% over the same date range.

The 10-year Treasury par yield was 5.05% in the Oct. 28 reading, up from 4.99% a day earlier. The observation came from indicative bid-side quotes around 3:30 p.m. ET (19:30 UTC), rather than completed trades. The Federal Open Market Committee held its federal funds target range at 3.75% to 4% in a 10-2 vote. Two members favored a 0.25-percentage-point increase.

The index tracks U.S. dollar corporate bonds issued by Microsoft, Alphabet, Oracle, Amazon and Meta. It contained 166 issues as of Sept. 30, and all of its sector exposure was classified as technology. Its yield reflects a point in time, while the total return measures the index’s performance across the prior 12 months. Fixed-rate bond prices tend to weaken when interest rates rise, and bonds with longer maturities usually face greater rate exposure.

Steven Purdy, group managing director and co-head of global credit at TCW, said, “We are comfortable that they can service this amount of debt. It’s not a dangerous amount of debt, but it’s a significant amount of debt.”

Meta projected capital expenditures of $135 billion to $145 billion for 2026. As of Sept. 30, it had $84 billion in notes outstanding by aggregate principal amount. The company said it expects to fund investments through operating cash flow, investment-grade debt, strategic partnerships and equity.

In its Oct. 26 plan, Meta outlined about $35 billion in underwritten offerings: approximately $22.5 billion in Class A common stock and $12.5 billion in depositary shares representing mandatory convertible preferred stock. It also described a future at-the-market program for about $60 billion in Class C shares. Meta has not agreed to establish that program; its final size, timing and terms remain undetermined, and its launch is not guaranteed. The company does not expect it to begin before Class C shares start trading in the first quarter of 2027.

TokenPost previously examined rate exposure in shorter-term bonds amid AI credit concerns.