Artificial intelligence has now expanded its dominance to US equities and the credit market.
The shift is rewriting how capital flows through Wall Street, with AI-linked companies crowding out traditional sectors from benchmark indices while also redefining the largest corners of the bond market.
AI Stocks Hit Record 45% of S&P 500 as Credit Markets Follow Suit
AI-linked stocks in November 2022.
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The shift in the credit market is equally stark. A record 15.4% of US investment-grade debt is now tied to AI, up +3.5 points since 2020. It has also become the market’s largest segment.
Total AI-linked debt has nearly doubled since 2020, reaching an all-time high of $1.4 trillion. Hyperscalers such as Amazon, Alphabet, Meta, Microsoft, and Oracle have dominated the trend.
Together, the five issued $121 billion in US corporate bonds during 2025, well above the $28 billion annual average they posted between 2020 and 2024.
“Never before has a single theme dominated both US equity and credit markets to this magnitude,” The Kobeissi Letter wrote.
The AI trade is also reshaping global equity leadership. Taiwan’s stock market cap climbed to $4.14 trillion, passing the UK’s $4.09 trillion for the first time.
The country’s market cap has tripled since 2020, driven almost entirely by semiconductor stocks. Taiwan Semiconductor Manufacturing Company (TSMC) alone accounts for more than 40% of the market capitalization.
In effect, the trajectory of AI adoption and monetization may now set the direction for much of the global market. Meanwhile, any pause could expose how much of that valuation rests on a single theme.
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