What are Munster's 2027 capex growth estimates?

Munster raised his estimate from 23% to 37% year-over-year for hyperscalers.

Why does Munster expect strong results from Google Cloud and AWS?

Due to rising demand for AI infrastructure, driving increased investment in data centers and chips.

Did Munster change his rating on Amazon and Alphabet?

No, he did not change his rating, but he raised future growth estimates.

Gene Munster Expects Google, AWS Cloud to Beat Q2 Estimates

Analyst Gene Munster predicts Google Cloud and AWS will exceed Q2 2026 earnings expectations, driven by rising AI spending. He also raised his 2027 hyperscaler capex growth estimate from 23% to 37%.

July 11, 2026

2 min read

Source: Stocktwits

Key Numbers

current capex growth estimate

23%

revised capex growth estimate

37%

Gene Munster, managing partner at Deepwater Asset Management, expects Google Cloud (GOOGL) and Amazon Web Services (AMZN) to beat analyst estimates for the second quarter of this year.

Recommendation Change

Munster did not change his current rating, but he raised his 2027 capital expenditure (capex) growth estimate for hyperscalers from 23% year-over-year to 37%.

Analyst Rationale

Munster believes accelerating demand for AI infrastructure is the primary driver of this growth. His estimates suggest companies like Amazon and Alphabet will increase investments in data centers and specialized chips to support generative AI applications.

Context

The forecasts come ahead of Q2 2026 earnings for both Amazon and Alphabet. In Q1 2026, both companies reported strong cloud revenue growth. Other analysts, such as UBS, have maintained Buy ratings on both stocks with raised price targets.

What to Make of It

Munster's estimates point to sustained AI spending momentum, supporting cloud revenues. However, investors should monitor operating margins, as higher capex may pressure near-term profitability.

Frequently Asked Questions

Gene Munster is the managing partner of Deepwater Asset Management and a well-known technology analyst.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.