If you're not buying hyperscalers here, you will regret it (Save this).
Milk Road AI Twitter · Milk Road AI (@MilkRoadAI) · 2026-07-30
Milk Road AI pitches Amazon, Google, Microsoft, and Oracle as buys, citing a $2 trillion combined cloud backlog converting to revenue at rising market rates while capex growth decelerates toward 10% by 2028, creating a structural free cash flow tailwind.
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Extraction
Topics: hyperscalerscloud-computingai-infrastructure-investmentfree-cash-flow
Claims
- Microsoft, Google, AWS, and Oracle hold a combined cloud backlog of roughly $2 trillion in locked-in future revenue.
- Nearly half of that backlog converts to actual revenue within 12-24 months, at prices higher than the original contract rates due to rising cloud market rents.
- Volume growth combined with price growth will drive compounding sales momentum well past 2028.
- Capex growth for hyperscalers is expected to decelerate to around 10% by 2028, widening the gap between accelerating revenue and cooling spending and boosting free cash flow materially.
Key quotes
When revenue is accelerating in price and volume at the same time capex growth is cooling, the gap between the two flows straight to free cash flow, which is why the argument here is that free cash flow should genuinely skyrocket once that crossover hits.
Almost half of that $2 trillion converts into actual revenue over just the next 12-24 months and it converts at materially higher prices than the original contracts.
Current market rental rates for cloud and AI compute capacity are already running well above what's baked into these older contracts and those rates keep climbing.