Morgan Stanley predicts that cloud computing spending will surge to $1.2 trillion.

Morgan Stanley expects global cloud computing capital expenditures to reach $1.2 trillion by 2027, a year-on-year increase of 30%, which is $170 billion higher than previous estimates made in the second quarter. The company stated that the four major U.S. hyperscale cloud service providers are still facing capacity constraints as demand for artificial intelligence continues to exceed supply. Alphabet, Amazon, and Meta have all raised their capital expenditure guidance for 2026, while Microsoft has maintained its spending outlook.