The debt of major technology companies is becoming attractive following a selloff driven by AI borrowing, according to Double Line's Robert Cohen. The corporate credit director noted that while an AI bubble may be forming, top-rated bonds from leading hyperscalers present value opportunities. Investor fatigue from excessive AI debt issuance has caused tech spreads to underperform the broader investment-grade market.

Cohen highlighted Alphabet and Amazon as compelling buys if their spreads widen beyond reasonable levels. He emphasized that these companies represent high-quality credits with stronger risk profiles than the average high-grade index. As of recent trading, Alphabet's 10-year bonds traded near 81 basis points over Treasuries, while Amazon's spreads widened to approximately 76 basis points.

Despite these increases, Cohen argued that the fundamental soundness of these credits makes them attractive against technical supply pressures. He warned that continued AI investment by tech giants could further widen spreads, potentially crowding out other corporate credits. The sector's underperformance may eventually reverse as valuations adjust to technical factors rather than fundamental deterioration.