Alphabet announced plans to issue $80bn in equity to fund its AI spending spree, marking the Google owner's first share offering in more than two decades. The company has already raised roughly $86bn in debt over the past year, including 100-year bonds. Shares dipped nearly 4 percent on the news — more than dilution alone explains — signaling mild investor pushback against the capital raise.

The cost calculus favors equity. Alphabet's 30-year bond trades at a yield of 5.65 percent, or 69 basis points above the 30-year Treasury. Selling shares at 30 times earnings is cheaper capital than issuing expensive debt. Goldman Sachs chief David Solomon noted there's "more greed than fear" in markets right now, which explains why companies are rushing to tap equity before sentiment shifts. Pimco's Lotfi Karoui points out that yield curves for investment-grade hyperscalers have steepened even as they flattened for other corporate borrowers.

Other hyperscalers may follow, but Alphabet likely enjoys a first-mover advantage. Janus Henderson's Divyaunsh Divatia says Alphabet wants to "take advantage by coming before" a wave of IPOs later this year that could strain market liquidity. Investors are also growing more discerning about AI capex: Alphabet's cloud business generates clear revenue, while Meta's AI monetization path remains less defined.