Investors may need to prepare for very large capex numbers from major cloud companies like Amazon (AMZN) and Microsoft (MSFT) as they report earnings this week. According to five-star-rated JPMorgan (JPM) strategist Samik Chatterjee, spending on AI infrastructure is rising even faster than expected. He now estimates that data center spending from the top U.S. cloud providers will grow by about 63% in 2026, up from a previous forecast of 52%. Because of this change, total spending could increase by more than $200 billion in just one year, which would be the largest jump ever.
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Forget margin or options. Here's how the pros trade AMZNGoing forward, the trend still looks very strong. Although growth may slow slightly, Chatterjee expects spending to rise by another 40% in 2027, which would again mean over $200 billion of additional investment. This shows how powerful the demand for AI has become. Indeed, Taiwan Semiconductor Manufacturing Company (TSM) recently reported a 35% increase in revenue to a record level, while Intel (INTC) also pointed to strong demand for AI chips.
On top of that, other companies are increasing their spending. For example, Tesla (TSLA) recently raised its capital spending plan to $25 billion, up from $20 billion, as it invests more in AI projects. However, higher spending does not always excite investors. In Tesla’s case, the stock dropped after the announcement. Therefore, investors should be ready for similar reactions if other large tech companies announce higher AI spending in the coming days.
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