AI debt spreads have eased after a volatile period, though credit-default swap spreads for Meta and Amazon remained sharply higher for the year as of October 27, 2026. Investors are now watching Oracle’s Investor Day and earnings from Alphabet and Amazon for signs of how much more the companies expect to spend.
Key Takeaways
- Meta’s credit-default swap spread has risen 177% year to date, while Amazon’s has gained 129%.
- Alphabet and Amazon are due to report quarterly results after the market close on October 28 and 29, respectively.
- Analysts expect both companies to report negative free cash flow for the third quarter.
AI debt spreads retreat from recent highs
Meta’s credit-default swap spreads fell after the company announced plans for a $95 billion stock offering on October 26. The spreads had risen the previous week, when Meta reported negative third-quarter free cash flow. Other credit-default swap spreads also rose before pulling back.
A credit-default swap is a contract that provides protection against a borrower defaulting. The source did not provide the spreads’ latest levels or the size of their recent declines.
Richard Cheng, head of Nuveen’s investment-grade corporate sector team, said investors had expected Meta to announce a large bond deal shortly after earnings. He said the absence of that announcement was a catalyst for tighter AI-related spreads.
| Item | Details |
|---|---|
| Oracle | Investor Day scheduled for October 28, 2026. |
| Alphabet | Quarterly results scheduled after the market close on October 28. |
| Amazon | Quarterly results scheduled after the market close on October 29. |
| Meta | Announced plans for a $95 billion stock offering on October 26. |
Spending and cash flow in focus
Alphabet and Amazon’s results will give investors a look at capital spending and free cash flow, as well as any updates to their outlooks. Both companies reported negative free cash flow in the second quarter.
FactSet consensus estimates call for Alphabet to report third-quarter free cash flow of negative $2.3 billion and capital expenditures of $55.2 billion. For Amazon, analysts expect negative $9.9 billion in free cash flow and $58.7 billion in capital expenditures. These are estimates, not reported results.
S&P Global Ratings estimated in August that hyperscalers would have negative free operating cash flow in 2026 and 2027. Cheng said investors are focused on the trajectory of capital expenditure guidance across the sector.
Oracle and off-balance-sheet commitments
Oracle is scheduled to hold its Investor Day on October 28. CreditSights analyst Jordan Chalfin said the company is especially important to investment-grade tech credit because it is more stressed than higher-rated peers.
S&P Global has also pointed to data-center and chip-financing arrangements that may not be fully visible on balance sheets. Mark Habib, digital infrastructure sector lead at S&P Global Ratings, said commitments such as data-center leases or chip purchases are not necessarily treated as debt.
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