- Meta has been hustling to bolster its data center infrastructure as it ramps AI products and services for customers
- But the company noted on its Q1 earnings call it'll have to spend more than expected this year thanks to rising costs
- Other hyperscalers are sticking to their original spending forecasts - for now
We told you before that hyperscalers have two options this year when it comes to capex: spend more or get less bang for their buck. It seems Meta is opting for the former.
During its Q1 2025 earnings call this week, Meta CFO Susan Li revealed the company is increasing its full-year capital expenditure guidance from $60-65 billion to $64-72 billion so it can execute on data center expansion plans.
And, as you might have guessed, the jump is largely related to rising hardware costs.
“The higher costs we expect to incur for infrastructure hardware this year really comes from suppliers who source from countries around the world. And there’s just a lot of uncertainty around this, given the ongoing trade discussions,” Li said, referencing tariffs without using the word.
Meta seems to be the only one being open about the current situation. Alphabet and Microsoft studiously ignored the subject of tariffs on their respective earnings calls, and Amazon only addressed them insofar as it related to the company’s retail business.
Hyperscalers' infrastructure investments
Collectively, the four companies shelled out $76.6 billion in Q1, most of which went to infrastructure investments to fuel their growing cloud and AI services.
Meta aside, none of the big three raised their capex guidance on the calls. Alphabet stuck to its guns about spending $75 billion in total this year.
Amazon didn’t address capex guidance on its call other than CFO Brian Olsavsky noting that it has “a lot of investment in infrastructure going on and planned for the second-half of the year.” The company previously laid out plans to spend a total of $100 billion this year.
Microsoft, meanwhile, reiterated plans to keep its fiscal Q4 (calendar Q2) capex consistent with its fiscal Q2, which came in around $22.6 billion. It’s worth noting that the company’s fiscal year ends in June, so it’s not exactly clear how much it plans to spend through the end of calendar 2025.
CFO Amy Hood said Microsoft’s capex spending will grow more slowly in its coming fiscal year, but didn’t mention a drop in capex. That implies it will at least keep up with its fiscal 2025 levels of around $21-23 billion per quarter.
Thus, looking ahead, that means hyperscalers have another $250-ish billion to $260-ish billion they plan to spend before the end of calendar 2025. But, of course, things could always change.