Hyperscaler AI Capex to Top $1 Trillion in 2027
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- Goldman Sachs strategist Ben Snider reports 2027 hyperscaler capex estimates surged from $929 billion (23% annual growth) to over $1 trillion (33% annual growth) during earnings season — more than $100 billion above pre-quarter forecasts.
- Meta raised the bottom of its 2026 capex range to $135 billion–$145 billion from $125 billion–$145 billion, but CFO Susan Li declined to offer a specific 2027 outlook, calling infrastructure planning "highly dynamic"; shares are down 7% over five days and 14% year-to-date.
- Alphabet's Q2 capex hit $44.9 billion, slightly above the $44.7 billion Wall Street estimate, with full-year guidance lifted to $195 billion–$205 billion from $180 billion–$190 billion; executives flagged a "significant" increase for 2027.
- Hyperscaler capex will exceed operating cash flow from operations for three consecutive years spanning 2026 through 2028, according to Snider's analysis.
- Microsoft stands alone as the only hyperscaler with a credible near-term free cash flow story, per Yahoo Finance's assessment.
Why it matters: Meta and Alphabet shareholders absorbed double-digit losses after both companies raised capex floors while refusing to quantify 2027 spending, and with capex exceeding operating cash flow through 2028, the hyperscaler business model now depends entirely on investors maintaining faith that AI revenue will eventually match infrastructure outlays.
