Hyperscalers Invest $400B in Data Centers, Amazon’s Obligations Join $1.5T Surge
Over the past 12 months, hyperscalers invested over $400 billion into data centers. Remaining obligations at Alphabet, Microsoft and Amazon climbed from $596 billion in early 2025 to $1.5 trillion by March 2026, prompting BCA Research to upgrade U.S. equities and Communication Services while cutting EU and Australian weightings.
1. AI Investment Boom
Firms like Alphabet, Microsoft and Amazon have directed capital expenditures exceeding $400 billion into data center infrastructure over the past year, signaling a strategic push to support expanding cloud and AI workloads.
2. Surge in Performance Obligations
Combined remaining performance obligations for Alphabet, Microsoft and Amazon rose from $596 billion in early 2025 to $1.5 trillion by March 2026, reflecting multi-year contracts and a substantial revenue backlog that enhances near-term cash flow visibility.
3. BCA’s Portfolio Rebalancing
In response to this investment surge, BCA Research upgraded U.S. equities to neutral and Communication Services to overweight, while downgrading EU and Australian equities, indicating confidence in AI-driven growth concentrated in North America.