Goldman Cuts Hyperscaler Bond Exposure Amid Supply Concerns

Goldman Sachs Asset Management is scaling back its investment in bonds issued by hyperscalers, companies that are heavily investing in artificial intelligence.

Lindsay Rosner, who leads multi-sector fixed income at Goldman Sachs Asset Management, expressed concern about the near-term supply of new bond deals. She noted that new bond sales have been replacing older deals 'all year long,' which can lead to a decrease in prices and an increase in yields for existing bonds.

The market's response is expected to be impacted by the almost $3 trillion in off-balance-sheet obligations held by hyperscalers, according to Moody's Ratings. This hidden leverage could make it more challenging for new bond deals to clear at higher prices, potentially widening credit spreads across the sector.