The tech giants fueling the AI boom generate so much cash relative to their debt that they have more than enough room to issue more, according to Bank of America.
In a note this week, analysts looked at the top five publicly traded AI hyperscalers: Meta, Alphabet, Microsoft, Amazon and Oracle.
BofA pointed out that while the companies can fund their near-term capital expenditures with cash, they are tapping debt markets for balance-sheet flexibility and better cost of capital. Last month alone, Meta, Alphabet, and Amazon raised tens of billions of dollars in the bond market.
Operating cash flow for the big five hyperscalers is expected to hit $577 billion this year from $378 billion in 2023, while debt should climb from $356 billion to $433 billion.
That means their overall debt burden is actually getting lighter as the debt-to-cash ratio should dip from 0.94 to 0.75.
