Catenaa, Saturday, September 19, 2026- Goldman Sachs raised its full-year investment-grade bond issuance forecast to $2.3 trillion by US companies in 2026, with a quarter of it related to AI companies.
Goldman Sachs team, led by Strategist Peter Oppenheimer, said in a note that while technology profit growth has remained strong, the surge in capex spending among the hyperscalers has increasingly eaten through their free cash flow, prompting companies to look for alternative sources of funding in the credit and equity markets.
Goldman said that the capex spending growth for AA-rated issuers has been substantial: the 65% year-over-year growth in Q2 marks the 10th consecutive quarter that aggregate AA capex growth exceeds 35%.
“They have also turned to the convertible bond market, where volume has also increased year-to-date, reaching $135 billion in the US, with AI-related borrowers driving 44% of total issuance, on our estimates,” the note said.
In the US, in particular, they said that the forward PE multiple for the S&P has come down from 22x at the start of the year to 19x, in line with its long-run average, despite the market being close to its all-time high.
Moreover, Oppenheimer and the team said that while US equities have driven the bulk of equity outperformance for much of the fifteen years post the financial crisis, the improvement in earnings across regions, and the sharper de-rating in the US, has resulted in equity performance being broader-based by geography.
Since 2025, the US equity market has been the weakest of the major regions, a turnaround from the dominant trend since the financial crisis and increasing investor returns from a more geographically diversified portfolio.
Goldman said that as equities have continued to outperform bonds, equity risk premia have fallen back to levels last seen in the late 1990s, leaving equity markets more vulnerable to further increases in bond yields. That said, in the US and Japan, the ERP has bounced off recent lows
The note also added that supportive profit growth has been accompanied by positive earnings revisions, with 2026 and 2027 estimates moving higher across major regions.
It said four broad areas have driven much of this profit growth: first, technology earnings remain very robust. Second, rising energy prices have pushed up profits in the commodity sector. Third, banks have generally posted strong earnings, supported by positive nominal GDP growth, steep yield curves, and strong private-sector balance sheets.
“Finally, sectors such as Industrials have benefited from the surge in AI capex spending, which has spilled over into improved revenues for the ‘pick and shovels’ of AI infrastructure,” Goldman Sachs said, adding that the breadth of the earnings growth has also increased the opportunity for investors to diversify across sectors as well as countries.
