Spending More, Growing Faster, path to $1.2T in Cloud Capex

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US Semiconductors

Spending More, Growing Faster, path to

$1.2T in Cloud Capex

Industry Overview

AI capex CY2 6/27 outlook now up + 78 %/+ 35 % YoY

02 August 2026

Four major US hyperscalers GOOGL, MSFT, AMZN (AWS), META reported C 2Q26

earnings this past week and provided updated outlook on their CY26/27 capex views.

From a high level, most continued to point to stronger CY26 spending outlook , with even

stronger multi -year forward capex views. C ompute remains mostly supply constrained

today, and we see increased hyperscale appetite to continue investing in capacity

backed by customer commitments (now reaching ~$2.3Tn vs. ~$2.0Tn in early July) and

quickly accelerating AI sales (all up +80 -100%+ YoY). Overall, we now see CY26

hyperscale capex at over ~$860bn+ (+ 80% YoY) and see path toward ~$1.2Tn (+ 38%

YoY) capex by CY27, with sales likely to continue improving . Declining FCF remains a

concern, but we see negative FCF margin to max out around -5-6% in CY27 -28, before

likely returning to healthy profitability as AI investments proliferate.

Key AI semis

beneficiaries include: 1) compute, 2) memory, 3) semicaps, 4) power semis, and 5) optics.

Equity

United States

Semiconductors

Capex now backed by $2 .3Tn+ of customer commitment

Capex is increasingly backed by multi-year customer cloud commitments and backlog ,

providing greater demand visibility and sustainability. Across the top 4 CSPs,

such

backlog now exceeds ~$2.3Tn+, or up +16% QoQ , from ~$2.0Tn last quarter. Notably,

MSFT reported $6 78bn of commercial RPO (+8% QoQ), with only 30% recognized

within the next 12 months, while ORCL disclosed $638bn of RPO, with just 12% due in

1 year and 34% in 2-3 years. ORCL ’s prepaid hardware contracts from customers also

reached ~$75bn , reducing the CSP ’s upfront capital and funding pressures . AWS

disclosed $ 496 bn of backlog ( >100% YoY ), while GOOGL Cloud backlog also grew to

~$514bn (vs. ~$460bn in Q1). Hyperscalers also point out their capex outlook

incorporates rising input costs (memory, wafers, substrates) , i.e. semis pricing power .

FCF pressured through CY28, but

AI sales/ROI improving

…