Bank of America strategists, led by Savita Subramaniam, suggest that investors should pivot their focus, noting that the market may be overestimating AI-related capital expenditures while underestimating consumer resilience. Current investment positions show IT services, consumer finance, and software stocks near record lows, while industrial stocks are trading near record highs.
Data from Goldman Sachs indicates that the five largest U.S. hyperscalers are projected to increase AI infrastructure spending to $1.2 trillion in 2027, compared to $800 billion in 2024. Following a 54% surge in 2027, the firm forecasts a 12% growth in 2028, bringing total expenditures to $1.4 trillion.
Despite rising costs, consumer spending habits remain active. Reports from Visa in June highlight that global consumers continue to make discretionary purchases by utilizing digital tools to compare prices and manage budgets. Meanwhile, consumers are adopting cost-saving strategies such as purchasing store brands and negotiating bills to maintain essential spending levels.
