Big Tech’s Borrowing Bonanza

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Now, listen closely. There’s been a right kerfuffle in the Big Tech kitchens lately. A spending spree, they call it – a “hyperscaling,” which sounds suspiciously like a particularly nasty skin condition. Billions are vanishing into the ether, all for these Artificial Intelligences. It’s like feeding a particularly greedy goblin – you just know it won’t be satisfied.

The Financial Times – a newspaper full of terribly serious grown-ups – has been muttering about “AI risks” and “corporate bonds.” Honestly, they make it sound like the world is about to be swallowed by a giant, calculating spreadsheet. Morgan Stanley reckons these tech titans will gobble up around $400 billion in bonds by 2026. That’s enough money to buy a small country, or perhaps a very large collection of rubber ducks.

All this spending is a bit like building a magnificent castle on a foundation of…well, let’s just say it isn’t granite. If these investments don’t bloom into something spectacular, there’ll be a bit of a tumble, and not just for the companies themselves, but for anyone foolish enough to have put their pennies in.

Let’s have a look at the players. First, there’s Nvidia (NVDA), the chip-making wizard, providing the brains for these digital monsters. Then there’s Oracle (ORCL), building the data centers – vast, humming warehouses full of blinking lights and secrets. And of course, the usual suspects: Alphabet (GOOG) (GOOGL), Apple (AAPL), Microsoft (MSFT), Meta (META), and Amazon (AMZN) – all offering a mix of cloud fluff and the promise of AI magic for everyone.

Company Ticker Debt-to-Equity (%) Debt-to-Capital (%)
Oracle ORCL 519.6 83.9
Apple AAPL 152.4 60.4
Amazon AMZN 43.4 30.3
Microsoft MSFT 32.7 24.6
Meta META 38.6 27.9
Alphabet GOOGL 11.4 10.3
Nvidia NVDA 9.1 8.3
Average 115.31 35.10

Now, despite all this spending, most of these companies aren’t exactly penniless. They’ve still got a fair bit of cash rattling around. Only Apple and Oracle seem to owe more than they possess – a rather precarious position, wouldn’t you say?

Company Ticker Total Cash & ST Investments Long-Term Debt
Alphabet GOOGL $98.5B $21.6B
Nvidia NVDA $60.6B $7.5B
Microsoft MSFT $89.5B $35.4B
Amazon AMZN $94.2B $57.9B
Meta META $81.6B $58.7B
Apple AAPL $54.7B $78.3B
Oracle ORCL $19.8B $100.0B
Source: KoyFin

The Debt-to-Equity and Debt-to-Capital ratios are the grown-up ways of saying, “How much trouble are these companies in?” Apple’s debt is a bit alarming, but they have a steady stream of income from subscriptions and, of course, those ever-popular iPhones – gadgets that seem to have become as essential as breathing for some. But Oracle… Oracle is a different beast altogether. Their debt is truly monstrous, and if their AI dreams don’t come true, things could get very messy indeed.

Now, let’s not forget the credit ratings. All these companies have been given the thumbs-up by S&P and Moody’s – the most important grown-up judges of financial health. Except for Oracle, of course. They’re hovering in the B range, which is a bit like being put on probation. Not terrible, but certainly something to keep an eye on. And wouldn’t you know it, Oracle’s debt is already on a “negative watch” – meaning it could be downgraded at any moment. A bit of a warning sign, wouldn’t you say?

The Foolish Bottom Line

This whole analysis gives us a good starting point for judging how much debt these tech giants are willing to take on to fuel their AI ambitions. I’m only truly worried about Oracle’s debt levels, but even they could end up being a big winner as businesses and consumers increasingly turn to AI for all sorts of clever tricks and efficient operations. It’s a bit of a gamble, of course, but sometimes the biggest rewards come from taking the biggest risks. Just keep a close watch on Oracle – and perhaps hide your pennies.

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2026-02-11 09:13