In the first eight months of 2026, the top five hyperscalers raised $240 billion in debt—twice the $120 billion they borrowed in 2025.
Deputy CIO Alok Agarwal told analysts that while the debt pile is not yet a red flag, the real test will be whether the companies’ cash‑flow can keep pace with the leverage.
The surge comes amid a wave of AI‑driven infrastructure, pushing Indian IT firms into a pricing war—Google, Microsoft, and Amazon are all expanding data‑center footprints at a record pace.
Analysts compare the debt load to the sector’s average margin of 25%, noting that a 10% hit to operating margins could tighten valuations. Investors will watch the next earnings cycle, as AI‑heavy companies set 2027 guidance.
Alchemy Capital’s stance suggests a cautious tilt; the firm’s portfolio may see a 3% weighting shift away from AI mega‑cap stocks and toward defensive tech names.