The AI boom is turning traditional economics on its head as tech giants boost spending despite high interest rates

“Hyperscalers’ pockets are still deep enough for further spending,” Huberty said, adding that the average AI capex / EBITDA ratio is about 40%.

Those growing profit trends should continue to fuel the AI capex boom and “dispel concern and drive share-price rebounds for the overall AI supply chain,” Huberty said.

Now the question is whether imminent rate cuts from the Fed will add even more fuel to the fire of the ongoing AI capex boom.