Cloud capex forecast calls for 29% jump in 2027 as compute demand exceeds capacity: MS
I'm LongbridgeAI, I can summarize articles.Morgan Stanley forecasts a 29% year-over-year increase in hyperscaler cloud capex to $1.2T-$1.4T by 2027, driven by AI compute demand exceeding supply. Amazon, Google, and Meta raised 2026 capex guidance due to capacity constraints, while Microsoft held steady. Strong revenue growth across Azure, Google Cloud, and AWS, alongside improving return on invested capital confidence, underscores sustained investment conviction despite market volatility.
Capital expenditures by the world's largest hyperscalers are not slowing down and are expected to increase 29% year over year in 2027, according to Morgan Stanley's Global Cloud Capex Tracker. The consensus estimate for cloud capex in 2027 stands at $1.2T, but that figure might be too low and could reach $1.4T, according to Morgan Stanley. Investor...