Cloud Capex Surges: Amazon, Alphabet, Meta, and Microsoft Drive Growth

Global cloud capital expenditures are set to surge, with the world's 11 largest hyperscale providers spending $445 billion in 2025, a 56% annual growth rate, and reaching $582 billion in 2026, a 31% year-over-year growth. Amazon, Alphabet, Meta Platforms, and Microsoft are expected to collectively spend $359 billion in 2025, a 57% increase, and $454 billion in 2026, a 26% increase. These four companies will account for 77% of global Capex growth in 2025.

Global cloud capital expenditures (Capex) are poised for significant growth in the coming years, according to recent reports. The world's 11 largest hyperscale providers are expected to spend $445 billion in 2025, representing a 56% annual growth rate. This spending is projected to reach $582 billion in 2026, a 31% year-over-year growth [1].

Among these providers, Amazon, Alphabet, Meta Platforms, and Microsoft are anticipated to collectively spend $359 billion in 2025, a 57% increase over the previous year. This amount is expected to rise to $454 billion in 2026, marking a 26% increase [2]. These four companies are projected to account for 77% of the global Capex growth in 2025.

The surge in cloud spending is driven by several factors, including the rapid adoption of artificial intelligence (AI) and the need for advanced infrastructure to support data-intensive applications. According to Dell'Oro Group, GPUs and custom AI accelerators now account for roughly one third of total data center capex, making them the single largest driver of growth [1].

Hyperscale cloud service providers, such as Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure, are leading the charge with vertically integrated solutions and custom architectures aimed at optimizing performance and lowering the cost of compute. These providers are expected to add over 50 gigawatts of new capacity over the next five years to meet the growing demand [1].

While a short-term slowdown may occur in 2026, long-term investments are expected to sustain growth through the forecast period. The Top 4 US-based cloud service providers are anticipated to account for nearly half of global data center capex in 2025, with the Rest of Cloud segment expected to grow at a CAGR of 39% [1].

References:

[1] https://www.morningstar.com/news/pr-newswire/20250806sf45174/data-center-capex-to-grow-at-21-percent-cagr-through-2029-according-to-delloro-group
[2] https://www.theglobeandmail.com/investing/markets/stocks/AMZN/pressreleases/33994211/the-zacks-analyst-blog-highlights-meta-platforms-alphabet-amazon-and-snap/