Bank of America projects $1.5 trillion in cloud and AI infrastructure spending by 2027, reinforcing long-term semiconductor demand.
Bank of America expects global cloud and AI infrastructure capital expenditure to hit $1.5 trillion by 2027, citing sustained demand despite recent market pullbacks. The forecast follows an 88% surge in the SOX index during Q2, which has since corrected 11% in a reset analysts describe as healthy rather than structural.
The pullback is viewed as temporary, with momentum expected to rebound as earnings and capex growth restore confidence. Analysts highlight ongoing merger activity, such as recent deals involving TXN and ON, as a potential long-term driver for the fragmented analog semiconductor sector.
Lower-cost Chinese AI models are seen as a positive for adoption, broadening compute and infrastructure demand. Risks are perceived to lie more in AI software economics than in hardware capex or semiconductor sales.