Investors have grown increasingly concerned about the sustainability of artificial intelligence (AI) spending, as large information technology companies commit significant capital to data centers, related infrastructure and AI capability. This cohort has traditionally not carried debt but is becoming a meaningful part of the investment-grade bond universe. Technology companies issued a record $108.7 billion in bonds in the fourth quarter of 2025, according to Moody’s Analytics.

This month’s First Cut identifies information technology stocks that are likely to generate positive returns on their capital investments and have the resilience to service new debt. The exchange-listed companies shown are those with a market capitalization of $8 billion or greater that have generated return on assets (ROA) and free cash flow growth greater than the respective sector medians of 0.6% and 18.4%.

Companies were also required to have a return on invested capital (ROIC) greater than the five-year average and a times interest earned ratio of 2.0x or higher. The times interest earned requirement limits passing companies to those that realize at least twice as much operating income—earnings before interest and taxes (EBIT)—as is needed to cover their interest payments. A ratio of less than 1.0x indicates that a company’s current earnings are not high enough to meet its current debt obligations, meaning that it will need to liquidate assets to shore up the shortfall or find additional funding.

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