Hyperscaler Capex Expected To Hit $1.1 Trillion In 2027, Up From $800BN This Year

With hyperscalers reporting now done, let's take a closer look at the biggest surprises and learnings they revealed for the first quarter of 2026. 

Let's Start with the cross-company learnings about the hyperscalers: at the start of '26, Morgan Stanley analyst Brian Nowak detailed why hyperscaler revenue is likely to be the most important incremental signal of GenAI ROIC this year… and results showed it last week with accelerating growth, better-than-expected backlogs, and product expansions (confirmed chip sales). He details why in his latest note (available here), which we excerpt below: