Microsoft, Meta Capex Surge as AI Server Supply Chain Revenue Momentum Strengthens: J.P. Morgan
Microsoft’s and Meta’s cash capital expenditures rose sharply year over year in their latest quarters, while guidance for the second half of the year and the following year increased further.
Microsoft’s and Meta’s cash capital expenditures rose sharply year over year in their latest quarters, while guidance for the second half of the year and the following year increased further. Azure cloud revenue accelerated, while Windows OEM revenue weakened. Meta narrowed its 2026 capital-expenditure range toward the high end.
J.P. Morgan said revenue momentum across the AI server supply chain remains strong and that constrained supply should support component pricing. The firm maintained its constructive view on the server sector and highlights Wiwynn, Delta Electronics and Accton, among other companies.
In a one-line conclusion, the note said Microsoft’s and Meta’s capital-expenditure guidance confirms that the AI computing arms race is far from over. It added that strong revenue momentum across the AI server supply chain and the pricing-power advantage created by supply constraints should continue to emerge.
The note identified Wiwynn, Delta Electronics and Accton, along with other AI server original-design manufacturers and key component suppliers, as beneficiaries because of improving order visibility and pricing power. It also viewed the broader AI server supply chain—including GPUs, liquid cooling, power equipment and printed circuit boards—as benefiting. Although the market already expects AI capital-expenditure growth, the note said the extent to which Microsoft’s and Meta’s second-half guidance exceeds expectations, as well as the benefits of supply constraints for component pricing, may not yet be fully reflected.
J.P. Morgan cited the following catalysts: changes in second-half AI server shipment volumes and average selling prices; rising adoption of new technologies such as liquid cooling; the pace at which GPU supply bottlenecks ease; and updated capital-expenditure guidance from other cloud providers, including Google and Amazon.
J.P. Morgan said revenue momentum across the AI server supply chain remains strong and that constrained supply should support component pricing. The firm maintained its constructive view on the server sector and highlights Wiwynn, Delta Electronics and Accton, among other companies.
In a one-line conclusion, the note said Microsoft’s and Meta’s capital-expenditure guidance confirms that the AI computing arms race is far from over. It added that strong revenue momentum across the AI server supply chain and the pricing-power advantage created by supply constraints should continue to emerge.
The note identified Wiwynn, Delta Electronics and Accton, along with other AI server original-design manufacturers and key component suppliers, as beneficiaries because of improving order visibility and pricing power. It also viewed the broader AI server supply chain—including GPUs, liquid cooling, power equipment and printed circuit boards—as benefiting. Although the market already expects AI capital-expenditure growth, the note said the extent to which Microsoft’s and Meta’s second-half guidance exceeds expectations, as well as the benefits of supply constraints for component pricing, may not yet be fully reflected.
J.P. Morgan cited the following catalysts: changes in second-half AI server shipment volumes and average selling prices; rising adoption of new technologies such as liquid cooling; the pace at which GPU supply bottlenecks ease; and updated capital-expenditure guidance from other cloud providers, including Google and Amazon.