UBS has strong cloud growth expectations ahead of hyperscaler earnings

UBS expects cloud infrastructure growth to accelerate as Microsoft, Amazon and Alphabet report Q1 2026, forecasting robust cloud revenue expansion that should underpin the shares of hyperscalers. UBS estimates March-quarter cloud revenue growth at roughly 38–39% for Microsoft Azure, 29–30% for AWS and 58–59% for Google Cloud, and says enterprise IT budgets are shifting to AI and data infrastructure in 2026. Analysts flagged rising GPU/CPU demand, broader AI-related use cases (including proprietary apps on Bedrock and rivals), and aggressive capacity expansion by hyperscalers, with some capacity directed to internal workloads. UBS remains constructive on cloud infrastructure exposure, noting capex commentary is likely to stay firm and could increase — a bullish backdrop for AI-exposed cloud stocks despite elevated investor expectations.