Shang Hai Zheng Quan Bao·2025-11-16 17:55Core Viewpoint - The article discusses the emergence of an "AI bubble" in the U.S. market, driven by a surge in bond issuance by major tech companies, raising concerns about sustainability and potential risks in both equity and debt markets [1][2]. Group 1: AI Bond Issuance - The scale of bond issuance by U.S. AI companies has exceeded $200 billion this year, with Oracle issuing $18 billion in September and Meta issuing $30 billion in October, marking the largest corporate bond transaction of 2023 [2]. - The primary driver behind this bond issuance is the significant capital expenditure required for AI infrastructure investments, as companies' free cash flow is insufficient to cover these expenses after accounting for stock buybacks and dividends [2][3]. Group 2: Market Reactions - There is a stark contrast between stock and bond market reactions; for instance, Meta's stock fell by 11.33% on the day of its bond issuance, yet the bonds were oversubscribed with demand reaching approximately $125 billion, setting a record for U.S. corporate bond issuance [4]. - The bond market prioritizes debt repayment capacity, and companies like Meta have stable cash flows and low leverage, which enhances investor confidence in their bonds despite stock market volatility [4][6]. Group 3: Financial Health and Risks - Concerns are rising regarding the sustainability of capital expenditures, as Oracle's capital spending has significantly outpaced its free cash flow, leading to a downgrade in its debt rating [6]. - The trend of heavy reliance on external financing marks a shift from previous practices where tech giants primarily depended on strong operating cash flows for expansion [6][7]. Group 4: Future Outlook - The current trend of intensive bond issuance may become the norm, with expectations of continued high levels of debt issuance driven by ongoing investments in data centers, chip development, and application deployment [7][8]. - However, there is a potential for differentiation in the market, where financially stable companies may continue to attract investors, while those with weaker financial structures could face rising financing costs and potential liquidity issues [7][8].