Corporate Bonds Yield 6.51% Led by Hyperscalers’ $93B AI Debt Issuance

Corporate bonds, particularly those from highly rated investment-grade companies, are currently offering attractive yields, with the 10-year Treasury yield around 5% and the Federal Reserve keeping rates steady. Investment experts consider this environment one of the best opportunities in recent market history to buy corporate bonds, highlighting major tech firms known as hyperscalers, including Alphabet, Amazon, Meta, and Microsoft. These companies have been issuing large amounts of debt to fund artificial intelligence projects such as purchasing chips and building data centers.

The VettaFi AI Hyperscaler Bond Index, tracking debt from major tech companies, yielded 6.51% at the end of September. Hyperscalers issued $93 billion in debt in 2025 to support AI-related capital spending, a marked increase from the $35 billion average issuance between 2020 and 2024. Despite the higher debt levels, experts say these companies have manageable debt and strong balance sheets, and their AI projects have so far been profitable. However, caution is advised as some companies face pressure on cash flow, exemplified by Meta’s negative free cash flow for the first time since its 2012 IPO.

Investors remain cautious about companies with heavy debt for AI expansion, such as CoreWeave, whose bonds and credit default swap spreads suffered recently. Oracle’s debt rating was downgraded by S&P Global in July. This shows that while the investment-grade corporate bond market offers high yields now, varying credit qualities and corporate strategies present different risk profiles. This matters to ordinary investors because current high yields in corporate bonds present a concrete income opportunity amid steady interest rates, but investors must consider company-specific risks like cash flow and debt levels.