AI-driven debt issuance pushes 30-year Treasury yields to 5.323%, pressuring valuations and borrowing costs across sectors.
US corporate bond issuance reached $1.7 trillion year-to-date, a 27% increase from the same period last year, driven by AI infrastructure spending. The surge has elevated long-term yields, with the 30-year Treasury hitting 5.323% on August 18, its highest level in 19 years.
Hyperscalers, data-center REITs, and power producers led the borrowing spree, outpacing 2025’s total issuance. The added duration supply competes with government debt, tightening financial conditions and lifting discount rates for future earnings.
Markets reacted as higher yields compressed valuations, particularly for high-growth AI stocks like Palantir, which trades at a P/E of 149. The trend risks further multiple compression as borrowing costs rise.