Jul. 31 at 10:26 PM
BofA just reinforced the long-term AI infrastructure thesis.
Key takeaways:
• Combined capex from
$AMZN,
$MSFT,
$GOOGL,
$META, and
$ORCL is projected to reach ~
$730B in 2026.
• Annual hyperscaler capex could surpass
$1T by 2027–2028.
• Cloud revenue is expected to maintain a 35–45% YoY growth trajectory through 2028, led by AWS, Azure, and Google Cloud.
• Free cash flow may remain under pressure in the near term as AI infrastructure investment accelerates, but that's the cost of building tomorrow's growth engine.
The market has spent months debating whether AI capex is sustainable.
The latest evidence suggests hyperscalers are doing the opposite of slowing down—they're investing even more.
If this outlook plays out, it remains a strong tailwind for the broader AI infrastructure supply chain, from semiconductors and networking to memory, power, and data centers.
The AI buildout is still in its early innings.
