JPMorgan Sees Tripling of Tech Giants' Capex by 2027, Semantic Equipment Bottleneck Looms

JPMorgan released an Asia tech strategy report on September 16, addressing market concerns surrounding AI infrastructure investment. The report concludes that the fundamentals of compute demand remain intact and will continue to drive capital expenditure growth.

The combined capex from Amazon, Microsoft, Google, Meta, Oracle, CoreWeave, and SpaceX is forecasted to rise from $443 billion in 2025 to $1.577 trillion in 2027, representing a year-over-year growth of 110% and 69%, respectively.

The report identifies semiconductor equipment as the most critical supply chain bottleneck around 2027, driven by increasing demand for wafer foundry, IC substrates, and advanced packaging. The memory sub-sector is expected to see healthy fundamentals but sentiment still needs repair.