BoA: AI Capex Exceeds Forecasts by 50% as WACC Hits 10%

Bank of America research reveals that AI capital spending is running 50% above forecasts this year, while revenue exceeds expectations by only 20%, creating a significant mismatch. Hyperscalers' weighted average cost of capital has surged from 4% in 2023 to 10% due to rising risk-free rates and debt/equity costs. Despite higher financing hurdles, BoA projects continued capex growth for top hyperscalers through 2028 and estimates that demand for new data center capacity (2026-2030) implies $9.5T in investment, $2.1T above current forecasts.