Morgan Stanley Sees Cloud Spending Surging

MORGAN STANLEY SEES CLOUD SPENDING SURGING TO $1.2T Morgan Stanley expects global cloud capital spending to reach $1.2 trillion in 2027, up 30% YoY and $170 billion above pre-Q2 estimates.

The firm said all four major U.S. hyperscalers remain capacity constrained as AI demand continues to outpace supply.

Alphabet ($GOOGL), Amazon ($AMZN) and Meta ($META) all raised 2026 capex guidance, while Microsoft ($MSFT) maintained its spending outlook.

Morgan Stanley believes consensus is still too conservative, forecasting cloud capex could reach $1.4 trillion, driven by strong AI adoption, rising cloud demand, multi-year customer commitments and improving returns on infrastructure investment.