Tech CapEx-to-Sales Ratio Hits Record 11.5% on AI Boom
Developed market tech firms have reached a record CapEx-to-Sales ratio of 11.5%, driven by the AI buildout, with utilities also seeing a surge to 23%.
The CapEx-to-Sales ratio for developed market technology companies has surged to a record 11.5%, according to data from The Kobeissi Letter. This marks a 4-percentage-point increase over the past two years, the largest two-year gain in history. Previous peaks were 9.0% in the 1990s and 8.5% in the early 2000s.
The AI investment wave is also boosting capital spending in other sectors. Utilities now lead with a CapEx-to-Sales ratio of approximately 23%, well above their long-term average of ~15%. Excluding tech, developed markets' CapEx-to-Sales ratio stands at just 7.0%, below its own historical average. The data highlights how AI-driven investment is reshaping capital allocation across the economy.
Source: The Kobeissi Letter