Alphabet is tapping the debt markets for up to $25 billion, a move that underscores how artificial intelligence spending is reshaping Big Tech's financing playbook. The Google parent's multi-tranche bond offering, reported by Reuters, comes as the company projects capital expenditures of $195 billion to $205 billion for 2026, with AI infrastructure as a primary driver.
Investor appetite appears strong, with Bloomberg reporting roughly $115 billion in orders—more than four times the planned issuance. The notes span up to 10 maturities, from two to 40 years. This follows a sharp deterioration in Alphabet's free cash flow, which turned negative at $5.9 billion in the second quarter, versus nearly $25 billion positive a year earlier. The company also completed an approximately $85 billion equity raise earlier this year, after initially targeting $80 billion.
The bond sale is part of a broader trend across the tech sector. According to Reuters, Amazon, Alphabet, Meta, and Oracle issued about $194 billion in bonds through early July, up 79% year-over-year, as hyperscalers increasingly rely on debt to fund AI buildouts. Goldman Sachs estimates that about one-third of hyperscaler capital expenditure will be debt-financed in 2026. For more on Alphabet's AI-driven capital strategy, see this analysis of the bond sale's record demand.
Memory stocks slide despite solid earnings
AI-related memory stocks remained under pressure even after Western Digital and Sandisk delivered better-than-expected quarterly results and upbeat revenue guidance. Western Digital shares dropped about 12%, while Sandisk fell around 4.7%, as investors appeared to have priced in perfection following strong rallies in AI storage names this year.
Micron Technology recovered some early losses but still traded lower, while SK Hynix's US-listed shares fell about 5%. Seagate Technology also edged down. Although Micron generates most of its revenue from DRAM rather than flash memory, its stock has weakened over the past month after a nearly 700% gain in the prior year, as investors reassess the durability of AI spending. The broader tech selloff is also evident in Wednesday's Dow decline.
Gold slips as oil revives inflation fears
Gold reversed course after its strongest daily gain since February, as rising oil prices reignited inflation concerns. Spot gold fell 0.19% to around $4,234.76 per ounce, after climbing more than 4% on Wednesday to its highest level since mid-June. US gold futures also declined 0.2%.
The reversal followed reports that an Iranian parliamentary committee is reviewing legislation that would restrict US, Israeli, and other vessels deemed hostile from transiting the Strait of Hormuz. Higher crude prices could fuel inflation by increasing energy costs across the economy, potentially reinforcing expectations that the Federal Reserve may keep interest rates higher for longer. Traders currently price in roughly a 57% probability of a September rate hike and an 84% chance of another increase by December, according to CME FedWatch data. Silver and platinum also declined, while palladium posted modest gains.
Oil climbs on Hormuz tensions
Oil prices rose more than $3 per barrel after reports that Iran is considering legislation to prohibit US and Israeli vessels from using the Strait of Hormuz, with fines of up to 20% of cargo value for violators. Brent crude climbed to about $83.37 per barrel, while West Texas Intermediate advanced to around $78.15.
The proposed restrictions add fresh uncertainty after earlier optimism surrounding diplomatic efforts involving Iran and Oman. The Strait of Hormuz remains one of the world's most critical energy chokepoints, carrying roughly one-fifth of global oil and liquefied natural gas supplies before the conflict began earlier this year. Markets also continued to monitor broader regional risks, including fresh Houthi attacks against Saudi-linked targets, while Gulf crude exports remained well below pre-war levels. For more on the oil price dynamics, see this update on Brent's recent volatility.
The combination of Alphabet's debt raise, memory stock volatility, and geopolitical tensions in the Middle East is keeping investors on edge. As AI spending continues to drive capital markets activity, and energy prices fluctuate on supply concerns, the macro backdrop remains uncertain. For a broader look at today's market moves, including the impact on equities, see this summary of the Dow's modest gain.
This article is for informational purposes only and does not constitute financial advice.
