Fitch warns of bubble risks from AI spending surge
Fitch Ratings is sounding the alarm: All the hype and massive spending on AI might be pushing tech stocks a little too high.
In its latest outlook, Fitch warns that if things cool off suddenly, like during the dot-com crash, it could hit global credit markets hard.
Even though all this IT investment boosted US GDP growth, there are worries about what happens if rules, competition, and job impacts aren't sorted out soon.
S&P 500 valuations near record highs
Fitch points out that today's market feels a lot like the late 1990s tech bubble, with S&P 500 valuations near record highs.
Amazon, Alphabet, NVIDIA, Meta, Oracle, and SpaceX together raised $182 billion in investment-grade bonds, while overall US corporate bond issuance surged 26% in the first half of 2026, driven by AI-related fundraising.
And get this: capital expenditure by Alphabet, Amazon, Meta, and Microsoft is projected to jump to $700 billion this year.
Fitch also cautions that rapid changes could cause labour-market disruption.