Academy Securities strategist Peter Tchir says AI capital spending is producing a rare equity–credit split. He remains cautious on AI equity valuations, warning markets could renew scrutiny of capex scale and returns. By contrast he favors bonds financing data centers and AI infrastructure for their higher total yields and potential for spread tightening. Alphabet’s recent plan to raise about $20–25 bln in the US bond market to fund large-scale AI investment exemplifies the dynamic; markets have

Academy Securities strategist Peter Tchir says AI capital spending is producing a rare equity–credit split. He remains cautious on AI equity valuations, warning markets could renew scrutiny of capex scale and returns. By contrast he favors bonds financing data centers and AI infrastructure for their higher total yields and potential for spread tightening. Alphabet’s recent plan to raise about $20–25 bln in the US bond market to fund large-scale AI investment exemplifies the dynamic; markets have already flagged capex-driven pressure on Alphabet’s free cash flow and equity valuation. Reuters data show Amazon, Meta, Oracle and other tech giants have also stepped up debt issuance this year. The same AI outlay can mean cash-burn and return-risk for shareholders while offering yield pickup to credit investors, prompting a shift from equity-only AI trades toward repricing within capital structures.