Hyperscaler Bonds Get Lift from Amazon Earnings

Dow Jones00:50

Amazon.com's strong earnings are providing a boost to battered AI hyperscaler bonds.

Amazon shares jumped 15% Friday after the company reported accelerating cloud-computing sales. The momentum carried over to its bonds: the extra yield, or spread, investors demand to hold its 6.1% bonds due in 2056 over Treasurys dropped to 1.1 percentage point from 1.23 percentage point Thursday, according to MarketAxess.

Bonds backed by other hyperscalers also rallied relative to Treasurys, including those issued by Meta Platforms, Alphabet and Oracle. Investors have been demanding higher yields to hold those bonds in recent weeks amid increasing concerns over how much the companies will borrow and spend to fund chip purchases and the construction of data centers.

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