Cloud’s silicon lining

“Every cloud has a silicon lining” might be an apt update to the well-known adage. While investors had been concerned that the pace of investment into AI infrastructure might slow, during recent earnings calls, the largest cloud computing providers raised their outlooks for capital spending this year. The message from Alphabet, Amazon, and Microsoft was consistent, with each company noting that demand for AI and cloud computing services outstripped their capacity to provide them. Morgan Stanley estimates that global cloud computing capital spending will reach USD 353 billion in 2025, a figure that is nearly USD 28 billion greater than their previous estimate. Those investments should provide continued support for a wide range of technology suppliers from Nvidia’s AI accelerators to SK Hynix’s memory chips.

Source: Morgan Stanley, February 2025