Tech & Internet 2025 Credit Outlook: A Risk, Reward Mismatch

Technology's safer-haven, defensive characteristics keep us bullish on the sector. Yet with spreads that are almost the tightest in the high-grade universe, we see limited potential for relative excess returns or absolute compression, even as AI demand dynamics exude signs of meaningful growth. Tech credit quality is arguably at historical highs as we approach 2025, and it may continue on a stable or rising trajectory. Excess cash flow remains abundant and balance-sheet strength may have never been better.