MS&MCHI Upgrades 2026 Global Cloud CapEx to $7.35T, +60% YoY

Morgan Stanley upgrades global cloud capital expenditures to $7.35 trillion for 2026, a 60% year-over-year increase, upping the prior-quarter forecast by 22 percentage points and about $1.2 trillion. The acceleration follows strong guidance from Alphabet (GOOGL-US), Amazon (AMZN-US), and Meta (META-US), with AI-driven data center expansion and token processing growth driving the uptick. The firm projects 11 major cloud providers will spend $7.95 trillion in 2026, above market consensus by about 8%. For the year, the revised total rises to $1.2 trillion from $710 billion, adding $500 billion and reaching roughly 26% of total revenue—about three times the 2014–2023 average. Meta forecasts 2026 capex of $1.15T–$1.35T (73% YoY), Google $1.75T–$1.85T (97% YoY), with 60% allocated to servers and 40% to data centers and networking. Amazon expects $2.00T at 52% YoY, emphasizing rapid conversion of new capacity to revenue. Microsoft maintains a strong server focus despite a seasonally lighter third-quarter spend.