Morgan Stanley: CapEx
Major AI Infrastructure & Capex Surges> $1.4 Trillion Capex Forecast: Morgan Stanley has raised its total hyperscaler capex forecast to $1.4 trillion by 2028 (up from ~$1.2 trillion in 2027), driven by an updated bottom-up cost model and rising forward capacity expectations. > 4x Compute Capacity Growth: This heavy investment is projected to expand total available hyperscaler compute capacity to 120 GW by 2028, up from ~30 GW in 2025. > Rising Data Center Costs: Estimated data center deployment costs per gigawatt are increasing across multiple architectures due to inflationary pressures on memory and "outside the rack" (powered shell) development costs. Costs are modeled at $35bn for GB200, $39bn for GB300, and $49bn for Vera Rubin. > Bottlenecks and Timelines: Constraints on chips/racks, powered shells, and other supply chain bottlenecks are stretching data center construction timelines to as long as 3 years. Meta> Capex Expansion: Morgan Stanley significantly raised Meta's '27/'28 capex projections by 29% and 22% respectively, reaching $225bn in 2027 and $250bn in 2028. Higher depreciation from this spend modestly reduces '27/'28 EPS estimates.> API Revenue Stream: The rollout of Muse Spark 1.1 is priced aggressively (30%–85% below private peers). Morgan Stanley models that every 100 MW of compute allocated toward Meta's API could generate $8bn in revenue and ~$2 of '28 EPS.Amazon > Capex and Growth Expansion: Total company capex estimates were raised by 15% and 29%, reaching $308bn in 2027 and $318bn in 2028. > AWS Revenue Acceleration: Backed by private lab deals, AWS revenue growth is projected to hitting 40% y/y in '27 and 36% y/y in '28. AWS backlog is expected to hit ~$475bn in Q2.Google> Cloud Dominance vs. Tactical Risk: Google Cloud is modeled to achieve massive 77%/78% growth in 2026/2026.$Alphabet(GOOGL.US) $NVIDIA(NVDA.US) $Amazon(AMZN.US) $Meta Platforms(META.US)
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