Bank of America’s new research finds AI capital spending running 50% above forecasts this year while revenue runs only 20% above, and that mismatch drives the rest of its analysis.

Hyperscalers’ weighted average cost of capital has risen from 4% in 2023 to 10%, as risk-free rates sit more than 4% above pandemic lows and debt costs, equity costs and betas have all climbed.

The BoA research still projects capex for the top 5 hyperscalers plus neoclouds at $956B in 2026, $1.32T in 2027 and $1.5T in 2028, which works out to growth of 38% and then 14%.

Its demand math puts 212GW of new data center capacity between 2026 and 2030 at about $9.5T, $2.1T above the current $7.4T capex forecast.