Software: New Stack: 2Q26 Hyperscaler Results – Growth Accelerates Again, Raising Expectations for Cloud Infra Software

Research evidence excerpt

M

Update

August 5, 2026 04:27 AM GMT

Software | North America

Morgan Stanley & Co. LLC

Sanjit K Singh

Equity Analyst

New Stack: 2Q26 Hyperscaler

Results – Growth Accelerates

Again, Raising Expectations for

Cloud Infra Software

In aggregate, hyperscaler cloud growth accelerated for the 5th

quarter in a row in 2Q (+48% YoY vs +39% in 1Q26) indicating a

supportive consumption + migration backdrop heading into

SNOW/MDB/DDOG results… but expectations are rising and

multiples are elevated.

Adam Wood

Equity Analyst

Jamie Reynolds

Research Associate

Jonathan Eisenson

Research Associate

Software

North America

Industry View

Attractive

Broad-based Cloud Acceleration Sets a Supportive Consumption Backdrop

Heading Into Infra Prints... but Expectations Are Rising. Overall YoY hyperscaler

growth accelerated ~880bps QoQ, to +48% YoY (vs +39% YoY in 1Q26), with all

three clouds accelerating. Within the mix, AWS grew ~37% YoY (cc and reported), a

fifth consecutive quarter of acceleration reflecting the fastest growth in 18 quarters.

Microsoft Azure grew ~43% YoY cc (from ~39% cc last quarter), with management

continuing to flag demand in excess of available capacity. Google Cloud grew ~82%

YoY (from ~63% last quarter) and saw the greatest degree of acceleration, though

this quarter's figure is the first to include initial TPU system-sale revenue. That said,

management noted cloud growth accelerated meaningfully even excluding this

impact.

3 Key Themes from Hyperscaler Results. 1) AI as a driver was pervasive and

increasingly consumption-led – Amazon put its AWS AI run-rate above $25bn and

growing triple digits, Microsoft cited rapid adoption of AI-optimized databases for

agent memory and retrieval in Azure, and Google Cloud pointed to broad tokenconsumption metrics and TPU/GPU infrastructure demand. 2) Migrations / coreinfrastructure momentum strengthened, AWS emphasizing that AI is now pulling

core consumption alongside it (post-training and agent tool-use running on CPU/

core, with non-AI revenue also accelerating to the low 20%s YoY), a dynamic the

Microsoft echoed in tying AI adoption to accelerating cloud transition. 3) Data &

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