Investing.com — Wells Fargo said hyperscaler compute capacity is set to double to 98 gigawatts by 2027, as artificial intelligence demand continues to outstrip supply. This has also led to a surge in capital spending.
The brokerage estimates total capacity reached 49GW at the end of 2025, with Alphabet, Amazon and Microsoft accounting for about 39GW, or 80% of the total. It expects the three to maintain roughly 75% share through 2027.
Industry capacity additions are projected to rise to 22GW in 2026 and 27GW in 2027, exceeding the combined 20GW added in 2024 and 2025. By 2028, Wells Fargo sees total hyperscaler compute capacity reaching more than 125GW.
Google parent Alphabet is forecast to remain the leader, adding 19GW to reach 35GW by year-end 2028. Amazon is seen adding 16GW to 29GW, and Microsoft 16GW to 27GW. Meta Platforms is expected to expand capacity to 21GW by 2028, while Oracle scales to 11GW.
Wells Fargo said compute capacity is becoming the key constraint in cloud models, with shortages spanning chips, power and data center infrastructure. It estimates hyperscaler capital expenditures will nearly double to more than $860 billion by 2027, from $427 billion in 2025, with total spending of $2.47 trillion over 2026 to 2028, about 8% above consensus.
The firm raised its Azure revenue estimates and said its forecasts for AWS and Google Cloud Platform are above Street expectations for 2026 and 2027.
Wells Fargo said access to compute capacity will be a critical success factor in AI, citing strong demand following the launch of ChatGPT by OpenAI and subsequent AI product updates across the industry.
“Compute capacity is key success factor as AI-driven demand to materially exceed supply near to medium term. Cloud industry to grow meaningfully faster than consensus view,” analyst said.
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