Source: Fortune
Summary
Amazon’s surprise $25 billion bond sale on July 7 drew the weakest demand in recent history, with orders at just 2.5 times the bonds on offer. To secure the deal, Amazon had to offer extra yield on its longest bonds. The company’s debt issuance this year has reached $92 billion, surpassing other tech giants like Google, Meta, and Oracle. The bond sale will fund Amazon’s rapidly growing cloud computing business, Amazon Web Services (AWS).
Our Reading
The numbers tell one story.
Amazon’s bond sale was a “surprise” to Bank of America, but investors are pushing back. The company had to sweeten the terms to secure the deal. The slowing demand could be a warning sign about the future of the AI boom. Amazon’s cash grab will fund its rapidly growing cloud computing business, AWS. The company’s capex totaled $43.2 billion in the first quarter alone.
Investors are starting to notice the AI buildout is moving faster than they’re willing to soak up the debt.
Author: Evan Null
