The hyperscalers have a ways to go before reaching that number, according to Hammond. <\/p>\n
Hyperscaler cloud revenues have accelerated sharply this year, annualizing at about $70 billion above the pre-AI trend in the second quarter of 2026. Announced backlogs for the group exceed $1.5 trillion. <\/p>\n
“We estimate that AI users would need to spend roughly $1 trillion annually on AI applications in order for the hyperscalers to generate solid returns on investment and the application layer to generate strong profit margins on their compute expenses,” Hammond wrote. <\/p>\n The stakes are high for investors, who have plowed back into hyperscaler stocks in recent weeks amid AI optimism. <\/p>\n The Roundhill Magnificent Seven ETF (MAGS<\/a>) \u2014 which tracks the performance of top AI hyperscalers \u2014 is up 8% inside of a month compared to a modest gain for the S&P 500 (^GSPC<\/a>). <\/p>\n Brian Sozzi<\/a> is Yahoo Finance’s Executive Editor, host of the Sozzi Unleashed<\/a> morning show, the ‘Power Players With Brian Sozzi’<\/a> podcast and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi<\/a>, Instagram<\/a>, and LinkedIn<\/a>. Tips on stories? Email brian.sozzi@yahoofinance.com. <\/p>\n Click here for in-depth analysis of the latest stock market news and events moving stock prices<\/a> <\/p>\n Read the latest financial and business news from Yahoo Finance<\/a> <\/p>\n <\/a> Big AI investments well underway. <\/p>\n