Tech giants Alphabet, Amazon, Meta, Microsoft, and Oracle face growing investor scrutiny as hidden off-balance-sheet debt reaches $1.65 trillion.
Tech stocks recently rebounded from an AI-driven slump, but investors are beginning to show concern over the massive hidden debt accumulated by industry leaders. A Nikkei study reveals that off-balance-sheet debt for Alphabet, Amazon, Meta, Microsoft, and Oracle has swelled eightfold in four years, reaching an estimated $1.65 trillion. This surge is primarily driven by the rapid expansion of data centers and the ongoing artificial intelligence arms race. While these companies expect future earnings to exceed their current liabilities, the market is shifting from excitement to accountability. Goldman Sachs reports that hyperscaler leverage ratios have doubled in just six months, with $5.8 trillion in projected AI capital expenditures through 2030. Credit markets are signaling potential indigestion as borrowing accelerates faster than near-term cash generation. Investors are now seeking clear evidence that these massive upfront costs will produce lasting returns and sustainable cash flows, rather than just high valuations fueled by debt.