Morgan Stanley adds SpaceX to hyperscaler basket, lifting 2027 AI capex forecast to $1.15 trillion

Morgan Stanley has formally added SpaceX to its hyperscaler investment basket, a move that significantly elevates the projected scale of artificial intelligence infrastructure spending. The bank cited the company’s estimated $159 billion in capital expenditure as the primary driver for revising its 2027 forecast for hyperscaler AI capital spending to $1.15 trillion.

This classification places SpaceX alongside established technology giants including Amazon, Microsoft, Alphabet, Meta Platforms, and Oracle. The inclusion signals a broader recognition by Wall Street that the AI infrastructure boom is expanding beyond traditional cloud providers to encompass entities with substantial vertical integration in launch, connectivity, and energy.

The revised forecast represents a substantial upward revision from previous estimates. Prior to SpaceX’s inclusion, analysts had projected roughly $527 billion in hyperscaler capital spending for 2026 and approximately $1 trillion for 2027. The addition of SpaceX’s spending plans pushes the 2027 total higher, reinforcing the trend of consistently upward revisions in technology sector spending.

SpaceX’s current operational footprint supports the hyperscaler designation. In the second quarter, the company spent $15.8 billion on AI compute and currently operates 1.4 gigawatts of live capacity. Management has targeted more than 2 GW by the end of the year, with CEO Elon Musk outlining ambitions for 10 GW to 20 GW of capacity by the end of 2027.

The company’s vertical integration strategy, leveraging Starship for launch costs, Starlink for global connectivity, and in-house energy capabilities, distinguishes it from other entrants. Morgan Stanley’s assessment suggests that SpaceX is effectively converting energy into intelligence at a massive scale, a thesis that is reshaping investor expectations for the duration and intensity of the AI infrastructure cycle.

While the spending trajectory is steep, Morgan Stanley noted that execution risks remain significant. Bottlenecks in power availability, supply chains, permitting, and talent could constrain progress. Furthermore, the high valuation of SpaceX, following its recent Nasdaq listing which valued the company at approximately $1.77 trillion, leaves limited margin for error in executing such an ambitious buildout.

The surge in projected capital expenditure implies sustained demand for the broader supply chain. If the $1.15 trillion forecast materialises, it will necessitate continued massive investment in advanced semiconductors, memory, networking equipment, cooling systems, and power-generation infrastructure. The market’s focus remains on identifying the suppliers enabling this computing arms race, rather than solely predicting outcomes in the application layer.