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Investing.com -- Capital expenditures (capex) by the world’s largest cloud and AI infrastructure providers are accelerating sharply, with Jefferies now forecasting that the Big 3—Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Google—along with Meta (NASDAQ:META) and Oracle (NYSE:ORCL) will spend $417 billion in 2025 (CY25).
That figure marks a 64% increase from the previous year and is up 168% from 2023 levels. Jefferies also noted that the CY25 capex estimate has risen by $126 billion compared to a year ago, with Amazon and Microsoft seeing the largest upward revisions.
The surge in expectations is being driven by unrelenting AI-related demand, which continues to outpace infrastructure supply.
“We now expect Big 3 + META & ORCL to spend $417B in CY25 capex, up 168% from ‘23,” Jefferies analysts led by Brent Thill wrote, adding that Amazon saw the greatest upward revision in capex forecasts following its second-quarter results.
The company’s spending rose by approximately $7 billion quarter-over-quarter and is expected to maintain a pace of $32–33 billion per quarter in the second half of the year.
Microsoft and Meta also contributed to the ramp. Microsoft’s capital expenditure is expected to hit $121 billion in fiscal year 2026 (FY26), driven by persistent capacity constraints.
“We currently expect to remain capacity-constrained through the first half of our fiscal year," the tech giant said in its latest earnings call.
Meta raised its 2025 capex guidance midpoint by $1 billion and expects FY26 to grow by another ~$30 billion, implying over 40% growth year-on-year (y/y).
Meanwhile, Google (NASDAQ:GOOGL) boosted its 2025 capex forecast by $10 billion to $85 billion, pointing to strong demand for AI infrastructure and data center construction.
Oracle, while smaller in scale, continues to invest steadily, with spending growth expected at a slower pace compared to its peers.
The analysts note that this capex expansion is underpinned by massive contracted backlog, which rose 34% y/y across the Big 3 and Oracle in the second quarter.
Microsoft leads with a $368 billion commercial RPO, up 37% y/y, followed by Amazon’s $195 billion (+25%) and Google’s $108 billion (+37%). Amazon management cited power availability as “the single biggest constraint,” alongside intermittent issues with chips and server yields.
Despite the steep spending, management teams expressed confidence in returns.
“We have $368 billion of contracted backlog we need to deliver... I feel very good that the spend that we’re making is correlated to basically contracted on the books business,” Microsoft CFO said.