The bond market is screaming, but I'm listening to the AI cycle

The bond market is currently screaming for attention. The U.S. 10-year yield is above 5.2 percent, and the 30-year yield is around 5.6 percent. Still, my main scenario remains the same: the AI investment cycle isn’t over yet.

We saw two notable examples of this again this week.

Nvidia increased its share buyback program by $150 billion. This allows the company to repurchase $235 billion worth of its own shares through January 2028—the largest buyback program ever.

At the same time, we got our first look under the hood at Anthropic.

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The numbers are almost absurd. Anthropic’s revenue grew roughly twelvefold in 2025 to $4.6 billion. Meanwhile, the operating loss totaled over $8 billion.

On top of that, there are approximately $518 billion in future commitments for cloud capacity, computing power, and infrastructure. Yet investors are hoping for a valuation exceeding $2 trillion at the IPO.

That may sound insane, but it is in line with the scale of the current investment cycle.

The five major hyperscalers are expected to invest approximately $800 billion this year. Goldman Sachs also emphasizes that these companies represent only a fraction of global AI investments. By 2027, Goldman expects these hyperscalers alone to account for approximately $1.2 trillion in spending.

There are still plenty of reasons for optimism. OpenAI and Anthropic have yet to go public. AI investments continue to grow, and both the United States and China have strong geopolitical reasons not to lose the technology race.

Moreover, AI remains a technology that investors can dream about. As long as there is a belief that AI and robotics can drastically increase global productivity, capital will likely continue to flow into this sector.

And for the time being, the U.S. economy remains strong enough to support those investments.

This is offset by one increasingly significant problem: rising bond yields. The expansion of AI requires enormous amounts of capital. Precisely because of this, the demand for financing is increasing, and the cost of that financing is rising.

Meanwhile, a U.S. 10-year bond yielding over 5 percent is now starting to seriously compete with stocks. To me, that’s not just a risk. Such a bond can actually serve as an interesting hedge for a portfolio heavily weighted toward technology.

Oil also remains important. Brent is trading above $100 again after tensions between the United States and Iran escalated. At the same time, talks are continuing, meaning an unexpected diplomatic breakthrough could quickly change the market.

Another point to keep a close eye on is credit spreads. They’re starting to widen. That means weaker companies have to pay increasingly higher interest rates on top of the already high U.S. Treasury yields.

For now, spreads remain historically low. But the direction is important. If bond yields stay high and credit spreads continue to widen, financing pressures will begin to affect more and more companies.

That, to me, is where the real risk to the bull market lies. For now, however, that’s not yet a reason to change my base scenario.

AI investments remain massive; Nvidia is buying back its own shares for record amounts, and Anthropic is attempting to go public at a valuation of more than $2 trillion.

The turmoil surrounding interest rates and oil prices may persist for a while. But as long as the credit market doesn’t start to really crack, I still expect the AI bull market to resume afterward.

After all, most stock market indices are still hovering around their all-time highs.