JPMorgan Sees AI Boom Driving Record $1.8 Trillion Bond Sales in 2026

(Bloomberg) -- A caller question of spending to concern investments successful artificial quality volition assistance thrust 2026 issuance successful the US investment-grade marketplace to a grounds $1.81 trillion adjacent year, according to JPMorgan Chase & Co.

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The afloat twelvemonth projection surpasses the anterior grounds of $1.76 trillion acceptable successful 2020, JPMorgan recognition strategists including Nathaniel Rosenbaum and Eric Beinstein wrote successful a enactment Friday. Issuers looking to refinance implicit $1 trillion of maturing debt, a boost successful mergers and acquisitions, arsenic good arsenic the roar successful AI superior spending volition beryllium cardinal drivers for the worldly uptick successful caller bonds adjacent year, they said.

This year’s indebtedness binge was driven successful portion by amended borrowing rates, the surge successful AI spending arsenic good arsenic a revival successful acquisitions. Despite each the caller worries astir cracks forming successful the recognition market, JPMorgan joins others connected Wall Street that expect the momentum to widen into adjacent year.

The bank’s strategists expect the technology, media and telecommunications assemblage to get astir $400 cardinal successful the high-grade marketplace adjacent year. Technology firms unsocial volition bump up their issuance to $252 billion, they forecast, 61% much than what tech has borrowed truthful acold successful 2025. The strategists besides expect a 44% summation successful the user assemblage to $135 cardinal and 38% summation successful the media and amusement assemblage to $85 billion, portion telecom borrowing volition emergence 25% to $56 cardinal adjacent year.

JPMorgan expects the largest diminution to travel from US banks, a 6% driblet year-over-year connected the backmost of reduced proviso needs aft the supplementary leverage ratio reform.

M&A-related proviso is expected to emergence to $182 cardinal for adjacent year, up 21% from $151 cardinal truthful acold this year, by JPMorgan’s estimates.

The interest implicit tariff volatility and uncertainty implicit taxes that dampened expectations for M&A enactment successful the archetypal fractional of the year, has present eased, they said. The M&A pipeline is looking steadfast with $94 cardinal of deals to beryllium funded successful 2026 already announced and they expect different $88 billion, based connected expert forecasts for aboriginal deals driven by assemblage trends.

“The ‘animal spirits’ person returned arsenic it pertains to M&A with galore deals funded successful the high-grade marketplace successful caller weeks, with immoderate issuers adjacent pulling guardant deals from adjacent twelvemonth into 2025,” wrote Rosenbaum and Beinstein.