RBC: AI Capital Growth Driven by Soaring Memory Prices, Not Hardware

RBC Capital Markets analysts report that the rapid expansion in U.S. tech companies’ AI infrastructure spending is largely driven by surging memory prices, not increased hardware purchases. The firm estimates combined data center, chip, networking equipment, and related hardware spending for Amazon (AMZN-US), Google (GOOGL-US), Meta (META-US), and Microsoft (MSFT-US) will reach nearly $600B in 2026 to meet rising AI demand. Memory costs, including DRAM, HBM, and NAND, are pushing about 45% of 2026 cloud CAPEX growth. From $107B in 2025 to $2.37T in 2026, memory spending would rise by $1.3T, with roughly $980B of the increase due to price hikes, not quantity. According to TrendForce,DRAM prices could double and NAND prices rise over 85% in 2026. Excluding memory, CAPEX growth is expected to moderate to about 40% in 2026 from 80% in 2025. While AI investment fundamentals remain strong, memory prices are the largest uncertainty for 2027 CAPEX trends.