Morgan Stanley Raises 2027-2028 Cloud Capex Forecast to $1.2T-$1.4T; AI Compute to Quadruple to 120GW

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Morgan Stanley raised its capital expenditure forecast for five major cloud providers—Meta, Amazon, Microsoft, Alphabet, and SpaceX—on July 14, projecting combined capex of approximately $1.2 trillion in 2027 and $1.4 trillion in 2028, an increase of 9% and 10% respectively. The research firm attributed the upward revision to a 20% surge in GPU costs and extended data center construction cycles. AI compute capacity is expected to surge from around 30GW in 2025 to approximately 120GW by 2028.
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