This article first appeared on GuruFocus.
Consensus estimates for 2027 cloud capital spending now sit near $1.2 trillion, says Morgan Stanley, about 30% growth and $170 billion above where they stood before second-quarter earnings. The firm’s own aggregate estimate is $1.4 trillion, 17% higher than consensus.
Three of the four U.S. hyperscalers raised 2026 guidance. Alphabet (NASDAQ:GOOGL) moved its range to $195 billion to $205 billion from $180 billion to $190 billion. Amazon (NASDAQ:AMZN) lifted cash capex to about $220 billion from $200 billion, citing memory cost inflation. Meta (NASDAQ:META) narrowed to $130 billion to $145 billion from $125 billion to $145 billion. Microsoft (NASDAQ:MSFT) held at roughly $190 billion.
All four remain supply constrained, with external cloud demand and internal AI workloads running ahead of available capacity. Revenue accelerated anyway. Azure grew 43%, Google Cloud 82% and AWS 37%, the last its fastest in 18 quarters.
Morgan Stanley called consensus 2027 growth of 29% too conservative, since it implies non-AI cloud capex growing just 7%. The firm said hyperscalers sounded more confident on 2026 and 2027 returns, citing rising backlogs, multi-year commitments and pricing power.
