These Top Tech Providers Are Cashing In On Cloud Capital Spending

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Capital spending on building up cloud computing picked up in early 2018 led by Amazon.com (AMZN), Microsoft (MSFT) and Alphabet's (GOOGL) Google, as well as Facebook (FB) and Baidu (BIDU), a report released Tuesday said.

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That spending on the cloud's infrastructure also could boost providers of data center technology, says the report from Morgan Stanley.

"The largest contributors to overall 2018 year-over-year growth continue to be Google, Facebook, Amazon and Microsoft," the report said.

The increased spending on internet data centers and other cloud infrastructure signals strong demand for technology suppliers such as Arista Networks (ANET), Seagate Technology (STX), Micron Technology (MU), Nvidia (NVDA) and Broadcom (AVGO), says the report.

Arista Networks makes high-speed computer network switches while Seagate sells data storage systems. Nvidia and Broadcom make chips built into computer servers and networking gear while Micron produces computer memory devices.

'Hyperscale' Data Centers

So-called "hyperscale" data centers are packed with high-performing servers, communications and data-storage infrastructure.

"We see hyperscale data center investment inflecting above our prior expectations," said the Morgan Stanley report.

Amazon Web Services, the cloud computing business of the e-commerce giants, continues to rent more data center space from the likes of Digital Realty (DLR), says the report.

Facebook is likely to spend $14 billion to $15 billion in 2018 on data centers, servers, network infrastructure and office facilities, Morgan Stanley says.