GoKawiilGoogle, Amazon, Microsoft, and Meta plan to spend a combined $725 billion on capital expenditure in 2026, a 77% increase over last year's record $410 billion, according to first-quarter earnings reports compiled by the Financial Times.
Google led with 63% cloud revenue growth and an 81% jump in net income to $62.6 billion, while Meta's stock dropped 6% after hours despite a 33% revenue increase, punished by investors for adding $10 billion to its spending forecast and offering no firm timeline on new AI models.
But in the earnings calls, at least two of the four companies explicitly blamed rising memory chip prices for pushing budgets higher, confirming what market data and industry executives have been warning about for months.
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Memory costs inside the capex
Microsoft’s CFO, Amy Hood, told investors that rising prices for memory chips and other components accounted for $25 billion of the company's record capex budget. Microsoft set its 2026 spending at $190 billion, far above the $152 billion average analyst forecast. Hood warned that even with the additional investment, Microsoft expects to remain capacity-constrained on GPUs, CPUs, and storage through at least 2026.
Meta cited the same, with the company raising its full-year capex range to $125 billion to $145 billion, up from a prior ceiling of $135 billion. In its earnings release, Meta attributed the increase to "higher component pricing this year, particularly memory," alongside rising costs for land, power, and skilled workers needed to build data centers that now consume 70% of the world's memory output.
The timing of all this is hardly coincidental, with TrendForce having reported DRAM contract prices rising roughly 95% quarter over quarter in Q1 2026, with a further 58% to 63% increase projected for Q2. NAND is following a similar trajectory, with Q2 contract prices expected to climb 70% to 75%. Server DRAM and high-density DDR5 RDIMMs are absorbing the bulk of production capacity, and all NAND output for 2026 is already committed, according to Phison CEO Khein-Seng Pua.
Hood's $25 billion, therefore, helps to put a dollar value on what has previously been an abstract concern: If one company's memory cost inflation alone exceeds the entire annual capex of most semiconductor firms, the pressure on consumer DRAM and NAND supply becomes much easier to quantify.
Google Cloud's contract backlog
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