JPM Bits, Broadcasts & Bandwidth

J P M O R G A N North America Credit Research 27 July 2026

Bits, Broadcasts & Bandwidth Weekly Investment Grade TMT Review

In today’s TMT weekly, we first discuss Alphabet’s complicated 2Q print before North American Corporate Credit – turning to a number of other earnings, AMD and Anthropic’s agreement, Oracle’s Tech, Media, & Telecom (IG) government contract, more. Erica R Spear AC ( • Theme of the Week – It Takes Money to Make Money: Alphabet’s 2Q results offered the clearest evidence yet that its AI investments are translating into Quinn Degen revenue, but also highlighted the increasingly uncomfortable costs of ( sustaining that momentum. Search continued to monetize AI Overview and AI Mode without meaningful disruption to the core advertising business, while J.P. Morgan Securities LLC Cloud growth accelerated to 82% on exceptionally strong AI demand. The stock nevertheless dropped as Alphabet raised prior FY26 capex guidance by another $15bn to $200bn at the midpoint, reported negative FCF of • CHTR 2Q Results (24 July) ~$5.9bn and warned that spending will increase significantly again next • HG Analyst Focus List (23 July) year. The result is an increasingly difficult balancing act. Investors want proof • Hyperscaler Webinar (20 July) of AI monetization, but meeting the demand created by that progress requires • 2Q Earnings Calendar (20 July) still more infrastructure spending, while any slowdown risks ceding capacity • TMT Reference Sheet (14 July) and customers to competitors. Importantly, much of the capital deployed • IG TMT Weekly (10 July) has not yet begun generating revenue. Google remains supply constrained, • 2026 Mid-Year Outlook (7 July) is temporarily renting third-party capacity at lower margins, and expects the • Project Finance 101 (7 July) vast majority of revenue from existing TPU sales agreements to arrive in FY27, • IG TMT Weekly (2 July) meaning cash outlays are running well ahead of the related revenue and returns. • Comcast Split (29 June) As such, this timing mismatch is likely to keep FCF under pressure and make • AI Capex 2.0 Webinar (25 June) funding an increasingly important part of the story. Management continues to view operating cash flow as the primary source of capital, followed by debt and • AI Capex 2.0 (17 June) then equity, and it has already expanded debt from ~$16bn to ~$100bn over the • IG TMT Weekly (5 June) past year and recently issued equity to preserve balance sheet flexibility. This • Ad Market Update (2 June) suggests future investment will likely require an evolving mix of internally • IG TMT Weekly (29 May) generated cash and external funding, even if another broad equity raise is • TMC Recap (22 May) not currently planned. Following management’s 2Q commentary, we now • IG TMT Weekly (15 May) have higher conviction that we will see GOOGL return to the USD bond market • Telco & Cable Earnings (12 May) before the end of the year. • Data Center Project Finance (11 May) • IG TMT Weekly (8 May) • Trade of the week: we published two trade ideas in the 3Q HG AFL this week, • IG TMT Weekly (1 May) a short of CMCSA 2.937% ‘56s and a short of MSFT 3.450% ‘36s. • CHTR 1Q Results (24 April) • Primary Markets saw $1bn each from Netflix and Equifax, taking YTD TMT • CHTR Move to OW (20 April) supply to $331bn. • Tech Sector Upgrade (27 March) • Secondary Markets widened 3bps last week as Iran escalations continued. All • Software Covg. Report (24 March) TMT sub-sectors, particularly Tech (+9.0bps) and Media (+11.4bps), • Telco/Media Covg. Report (24 March) materially underperformed. • Hardware Covg. Report (24 March)

• Next week, 2Q earnings continue, and we especially look forward to hearing • ORCL F3Q Results (11 March) from META, MSFT and AMZN, as well as AMT, PYPL, QCOM, AAPL, • AI Disruption in IG Software (9 Mar.) DXC and more. • HG/HY Best Ideas (3 March) • 2026 TMT Outlook (8 December) • Administrative Note: Due to the overwhelming AI-related supply we have seen this year, we have added AI-specific supply tables (Tables 6 & 7) to this note. This includes all AI-related debt issued YTD across both the IG and HY markets as well as overseas markets.

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