Morgan Stanley analysts warn that hyperscaler AI investment is entering a new era of unprecedented capital intensity. According to the bank's research, capital expenditure-to-sales ratios for major tech companies are set to exceed the roughly 32% recorded during the dot-com boom, potentially reaching 38-45% by 2028.

Analyst Todd Castagno noted that spending plans have accelerated sharply while revenue expectations have lagged behind. Hyperscalers are expected to drive about 40% of total Russell 1000 cash capex over 2026-28, representing more than $2 trillion in investment. The bank highlighted that capex revisions have been "unprecedented," with 2026-27 spending estimates up $630 billion compared with six months ago.

Castagno believes the scale of spending has created significant modeling challenges, noting that 2026-28 revisions "reflect step-changes rather than incremental increases." The bank added that rising fixed-cost bases mean future earnings and free cash flow will become "more sensitive to changes in revenue expectations." Semiconductor suppliers remain the clearest beneficiaries, with Morgan Stanley citing 2026 sales revisions up roughly 60%.