Episode Details

U.S. tech companies smashed records this quarter, raising $252 billion—up from $234 billion last year—with AI firms driving nearly 40% of the surge. Behind the boom: hyperscalers planning $725 billion in capex by 2026, almost equaling their operating cash flow. To fund it, they’re turning to debt more than equity, with credit strategists forecasting over a third of 2027’s spending will come from global bond sales. Still, equity plays a vital role, especially when markets are strong. But strain is mounting—Alphabet hit negative free cash flow for the first time since going public and paused buybacks, while Amazon’s cash flow turned negative due to heavy infrastructure spending. Surprisingly, investors aren’t panicking: follow-on offerings price normally, and affected stocks rebound within months. AI is fueling record capital inflows without triggering a flood of new stock—so far.

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