AI boom: Big Tech capital expenditures now seen topping $1 trillion in 2027

The overall cost of the AI buildout has been causing heads to spin, but analysts say they're seeing flowthrough from investments to revenue as valuations and market caps surge."Cap-ex keeps climbing, but [return on investment] ROI is evident via ~$2 trillion backlog and accelerating cloud growth," Jefferies analysts said. "Margin leverage holds for the hyperscalers despite AI investments, highlighting structural [operating expense, or] opex discipline."Confidence on monetization is particularly high for Alphabet where backlog growth is undergirding computing inventories and expansions. The "backlog supports [the] cap-ex super-cycle," Brian Pitz wrote for BMO Capital Markets on Thursday.

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