Morgan Stanley Raises Cloud Giants' 2028 Capex Forecast to $1.4 Trillion; Meta Remains Top Pick

According to Morgan Stanley analyst Brian Nowak on July 12, the bank raised its 2027 and 2028 capital expenditure forecasts for Meta, Amazon, Microsoft, Google, and SpaceX by 9% and 10% respectively, to approximately $1.2 trillion and $1.4 trillion. The upward revision was primarily driven by hardware cost increases, particularly GPU-related costs rising about 20%.

Morgan Stanley maintains Meta as its top pick with a $775 price target, implying 15% upside. The bank identified five underprice growth drivers including Neocloud compute monetization, Meta AI, search business, API revenue, and subscription opportunities that could collectively add $10 to 2028 earnings per share beyond the base case of $33.