BofA's Sebastian Raedler says AI is the fiber and railroad cycle again: the tech works, investors still lose. Hyperscaler capex expectations ran from $330B to $1T, token prices are down ~50% since sum

What happened: Bank of America strategist Sebastian Raedler argued in an October 16, 2026 note that AI investors could lose money even if the technology succeeds, comparing AI to past capital cycles like railroads and fiber networks. Key numbers: Hyperscaler capex expectations rose from $330 billion in early 2025 to $1 Why it matters: Raedler said monetization disappointment amid intense competition is the failure mode seen in past capital cycles, and NVIDIA's revenue depends directly on hyperscaler budgets holding while Microsoft is seen as better positioned to weather a spending slowdown.

Bank of America strategist Sebastian Raedler argued in an October 16, 2026 note that AI investors could lose money even if the technology succeeds, comparing AI to past capital cycles like railroads and fiber networks.

Raedler said monetization disappointment amid intense competition is the failure mode seen in past capital cycles, and NVIDIA's revenue depends directly on hyperscaler budgets holding while Microsoft is seen as better positioned to weather a spending slowdown.