Information Technology – Sector Update – Hyperscalers Gain from AI Capex; Enterprises Wait
Published on 02 Aug 2026
The Hyperscalers’ growth performance outpaced consensus estimates and further strengthened correlation between cloud growth and AI buildout capex. Azure, AWS and GCP continue to grow at an impressive pace of 43%, 37% and 82% YoY respectively in the latest quarter ended 30th June, 2026. AWS and GCP’s cloud growth is slightly skewed towards consumer-facing generative AI usage, while also powering their internal product stacks. In contrast, Microsoft Azure remains predominantly enterprise-driven and, therefore, serves as a better proxy for enterprise AI adoption, as reflected in AI Foundry revenue (up 2x+ YoY), token consumption (1tn, up 4x YoY), and Microsoft 365 Copilot daily usage (up 3x YoY). Among these metrics, token consumption is particularly encouraging, reaching an annualized run rate of 1tn tokens in Q4FY26, up 4x YoY. However, we believe that the growth in these metrics, especially token consumption, is still largely driven by AI model development, experimentation, and testing, rather than the commercial rollout of enterprise business workflows. While the adoption of AI assets and frontier model capabilities has accelerated significantly over the past year, the relatively limited pilot-to-production conversion rate has prompted enterprises to remain cautious on token budgets and closely monitor metered consumption.
