The S&P 500’s next growth chapter may be written in server racks. A new Morgan Stanley projection puts global AI compute investment by hyperscalers and neo-cloud providers at approximately $1.58 trillion in 2027.
That spending is expected to make up roughly 5% of S&P 500 sales that year and about 25% of the index’s sales growth.
The other notable detail is how it gets paid for. Half of the projected investment is expected to be financed by debt.
The numbers behind the buildout
The 2027 figure marks a steep climb from around $980 billion in 2026. Morgan Stanley expects the total to keep rising, reaching $1.81 trillion in 2028.
The headline number also counts more than cash. It folds in lease commitments, which the bank estimates will contribute roughly $195 billion in lease capex in 2027, rising to $246 billion by 2028.
Including leases pushes the projection 14% above earlier estimates that tracked only cash outlays.
Oracle leads the lease pack at $57.2 billion. Microsoft, Meta, Amazon and Google follow behind it.
Across the group, hyperscalers currently hold over $1.1 trillion in pending lease commitments.
Who collects the checks
If AI spending is a gold rush, NVIDIA is still the one selling the shovels. The report forecasts the chipmaker capturing around two-thirds of AI-related inflows, amounting to nearly $690 billion.
Morgan Stanley estimates that broader “AI enablers” and “adopters” will together drive around 78% of S&P 500 earnings growth in 2027.
Goldman Sachs has reached a similar conclusion looking backward. The bank found that AI-related capital expenditure has driven nearly half of the recent earnings growth for the S&P 500.
The accounting wrinkle
Data-center leases function a lot like debt-financed asset purchases, but they are not recorded as capex. That means traditional cash-flow statements may understate the real scale of the buildout.
The research notes that high-rated hyperscalers still retain substantial borrowing capacity. They are, however, facing free cash flow pressure because so much of the spending is front-loaded.
What this means for investors
When around 78% of projected 2027 earnings growth leans on AI enablers and adopters, the index’s fortunes become closely tied to one investment cycle, and when a quarter of sales growth flows from a single theme, diversification looks different.
The research anticipates capex growth rates decelerating after 2027, even as total spending keeps climbing toward $1.81 trillion in 2028.
With over $1.1 trillion in pending lease commitments and half the projected investment expected to be debt-financed, investors may want to look past headline capex and check lease disclosures and borrowing trends. The hyperscalers’ strong credit ratings provide a cushion for now, but front-loaded spending paired with free cash flow pressure is a combination worth monitoring.
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.