Bank of America: AI Capital Expenditure Has Not Peaked, Monetization Determines Returns

S, according to Chao Xiang Research, Bank of America's October 16, 2026 research report notes that the weighted average cost of capital (WACC) for hyperscale vendors has increased from 4% in 2023 to 10%; this year's AI capital expenditure exceeded forecasts by 50%, while revenue only beat expectations by 20%; computing demand in 2030 corresponds to approximately $10 trillion in spending, $2 trillion higher than current estimates; under the base case, cumulative excess returns from 2026 to 2030 are about $200 billion, under the bear case cumulative losses are around $500 billion, and under the bull case returns approach $1 trillion.

Bank of America assesses that while AI capital expenditures continue to grow, whether monetization can cover capital costs will determine returns. The S&P 500 presents a balanced risk-reward profile over the next 12 months, with a long-term bullish outlook on U.S. equities; both Information Technology and Communication Services are equally weighted, favoring AI adopters, commodities, and physical infrastructure construction.