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In The Old Man and the Sea, an Ernest Hemingway classic, the fisherman Santiago says, “But I try not to borrow. First you borrow. Then you beg.”
The month of October reminded us how debt cuts both ways. The breathtaking rise in 2026 CapEx intentions for the five major hyperscalers over the last two years along with another year of strong growth forecasted for 2027 and rising interest rates have caused investors to question if companies are introducing undue risk to their businesses. This is showing up in wider credit spreads for hyperscalers at a time of increasing capital needs as cash flows have turned negative in aggregate for the group.
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