AI firms pile into debt markets while their shares tumble

During this year's second half, AI companies have unveiled more than $200 billion in fresh borrowing and equity financing deals — even though the PHLX Semiconductor Sector lost a quarter of its value over the same stretch.

Set up by the Philadelphia Stock Exchange in 1993, the PHLX Semiconductor Sector is a capitalization-weighted index of the 30 largest US-traded companies that design, distribute, manufacture and sell semiconductors.

With share prices across the AI sector sliding, executives have hurried to lock in financing through capital raises. Oracle this week filed $20 billion of new debt and equity offerings, on top of a record-breaking $95 billion financing plan from Meta.

Microsoft joined the rush as well, pricing a $25 billion bond on October 29 — its first substantial US debt sale in nine years.

The sector's biggest names are tapping investors simultaneously. Alphabet (Gemini AI), SpaceX (Grok AI), Meta (Meta AI), Microsoft (CoPilot AI) and Oracle have together announced $129 billion in combined financing since last week alone.

The mirror-image relationship between AI share performance and these companies' fundraising has been especially stark since June 30: borrowing has stepped up while share prices have crashed 27%, measured by SOXQ, an ETF that tracks the PHLX Semiconductor Sector index.

AI firms crank up their borrowing

So far in 2026, AI hyperscalers have already borrowed at least $214 billion, already 157% more than the $83 billion raised across the whole of 2025.

Meta's latest plan, unveiled last Monday, paired $35 billion of stock sales with a $60 billion at-the-market stock sale program.

A few days before that, Mark Zuckerberg's company guided $135-145 billion of capital expenditures for 2026.

Most of that money is funding the company's vast AI investments, with compute and infrastructure spending far outweighing the operating cash flow Meta expects to generate this year.

Another $20B bond offering from Meta, on top of the $95B in stock they announced last week. This comes about 4 hours after Oracle announced a $20B mixed shelf offering.

Every day, another 11-figure debt or equity offering, sometimes 2 at a time. The moment it stops, all hell…

— Nobody Special (@JG_Nuke) November 2, 2026

Nebius, an AI neocloud company, closed a $5.75 billion convertible sale in August. Its communications chief called it one of the largest corporate convertibles in the company's history.

CoreWeave, an AI neocloud endorsed by Jensen Huang, issued a further $4.2 billion of convertible debt on September 22, pushing its total debt above $35 billion.

CoreWeave's five-year credit default swaps broke through an alarming 1,000 basis points in October, as credit investors price in a growing chance of default.

Once off-balance-sheet commitments are counted, the hyperscalers' combined obligations approach $3.5 trillion, according to calculations from UBS.

Steep drawdowns across AI shares

While AI executives have scrambled to borrow, ordinary shareholders have lost faith in the business outlook. CoreWeave shares sit 63% below this year's high, and Nebius is down 53%.

Even the bluest of blue chips have posted enormous drawdowns.

Measured from this year's peaks, Oracle has declined 55%, Meta 22%, Alphabet 31% and Nvidia 17%.

Michael Burry, the investor who shorted subprime mortgages before 2008, has told subscribers that Nvidia's more than $500 billion of off-balance-sheet financing has “shades of Enron” and reads as “a sign of desperation.”