"On the surface, this may look like a relentless acceleration, but RBC's analysis suggests these growth numbers are being flattered by an unusual culprit: runaway memory prices. The RBC analysts found that soaring prices for data center memory chips - including DRAM, high-bandwidth memory (HBM), and NAND flash - could account for about 45% of the dollar growth in cloud capital expenditures for 2026."
"That $130 billion increase would represent about 45% of total capex growth at those companies. Even more striking, around three-quarters of the memory spend increase - roughly $98 billion - is attributable purely to higher prices, not higher unit volumes. The price shock is severe. TrendForce projections cited by RBC show DRAM prices more than doubling in 2026, while NAND prices are expected to rise more than 85%."
"Big Tech's latest capex projections have shocked investors. Look beneath the headline numbers, though, and spending may actually be growing far more slowly. That's according to new research on Monday from analysts at RBC Capital Markets. Amazon, Google, Meta, and Microsoft are expected to spend almost $600 billion this year on data centers, chips, networking, and other related gear to meet surging AI demand."
Projected capital expenditures by Amazon, Google, Meta, and Microsoft approach $600 billion as AI demand grows. Much of the dollar growth stems from sharply higher prices for data-center memory chips such as DRAM, HBM, and NAND rather than large increases in hardware volumes. Data-center memory spending across the top hyperscalers is forecast to rise from about $107 billion in 2025 to roughly $237 billion in 2026, a $130 billion jump that represents about 45% of total capex growth. Approximately $98 billion of that increase reflects price inflation alone, while DRAM and NAND prices are projected to surge more than doubling and about 85%, respectively. Excluding the memory-price shock, overall Big Tech capex growth may slow notably.
Read at Business Insider
Unable to calculate read time
Collection
[
|
...
]