According to Moody's Ratings analysts, large-scale AI investments could weaken the credit metrics of US hyperscale cloud service providers, but substantial capital buffers can alleviate related pressures. As capital expenditures grow faster than cash flow from operations, the free cash flow of US hyperscale cloud providers is expected to decline between 2026 and 2027. With companies such as Meta, Alphabet, and Oracle increasing bond issuances, leverage pressure is expected to intensify further.

Moody’s rating analysts stated that large-scale artificial intelligence investment could weaken the credit metrics of US hyperscale cloud providers, but strong capital buffers can help mitigate the related pressures. As capital expenditure growth outpaces cash flow from operating activities, the free cash flow of US hyperscale cloud providers is expected to decline in 2026 to 2027. With companies such as Meta, Alphabet, and Oracle increasing bond issuance, leverage pressure is expected to intensify further. However, hyperscale cloud providers all possess substantial cash reserves, and together with revenue and EBITDA growth, this enables them to withstand high levels of capital spending for 12 to 24 months without significantly impairing credit quality.