IG Credit Strategist: Sizing up the hyperscalers

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IG Credit Strategist: Sizing up the hyperscalers

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IG Credit Strategist

Sizing up the hyperscalers

Sizing up the hyperscalers 22 May 2026

Spreads for the four high quality hyperscalers continue to trend wider, even as the IG Credit Strategy

index overall is tighter YtD. That makes the relative value for hyperscalers attractive, United States

particularly as ~90% of the full-year 2026 hyperscaler supply should now be behind us.

One concern is that the brisk pace of supply will make individual issuers and the sector

too large, hitting concentration limits for investors.

We are less concerned, as hyperscaler size in the global IG index size should remain

comparable in 2026 and 2027 to other larger sectors (top non-US banks, large cap

telecom) and well below the big six US banks. USD supply from the big six US banks Yuri Seliger

should also exceed that from the hyperscalers. Credit Strategist BofAS

+1 646 855 7209

1Q26 IG fundamentals final update: more earnings, less yuri.seliger@bofa.com

cash SohyunCredit StrategistMarie Lee

Our almost-final estimates show that US IG credit fundamentals were strong in 1Q, BofAS+1 646 855 7217

although cash declined. Net leverage increased, while gross leverage was unchanged. sohyun.lee@bofa.com

Earnings growth was strong. The results are based on data for 88% of issuers in our See Team Page for List of Analysts

sample that tracks public US IG issuers ex. Financials and Utilities.

Rolling at a lower cost

Despite the jump in yields, issuer's cost of refinancing maturing bonds declined to near Recent credit strategy research

the lowest level since October 2024. That is a result of 1) higher coupons on maturing Publication Name

debt and 2) the shift away from long-end supply.