Wall Street analysts project that total capital expenditures (capex) for artificial intelligence could exceed $1 trillion by 2027, fueled by aggressive spending plans from major tech companies. Following recent earnings calls, firms like Evercore and Bank of America revised their estimates for 2026 capex to between $800 and $900 billion. Companies such as Alphabet, Amazon, Meta, and Microsoft are ramping up their investments, with Microsoft leading the charge at a 24% increase to $190 billion this year.

This surge in spending underscores a broader trend of rising demand for AI capabilities, which is translating into significant revenue growth, particularly in cloud services. Alphabet’s cloud revenue soared 63% year-over-year, prompting a notable stock increase. However, skepticism remains among investors, especially regarding Meta’s capex strategy, as its free cash flow has sharply declined.

The ongoing capex growth presents a favorable outlook for chipmakers and technology suppliers, with analysts highlighting strong demand for custom chips. As hyperscalers continue to invest heavily in AI infrastructure, companies like Nvidia and Intel are well-positioned to benefit from this super-cycle in technology spending.

StoxFeed tracks this as a market signal: AI and semiconductor stocks are driving tech sector gains

Source: cnbc.com