From MarketWatch, November 5:
Wall Street sees Google Cloud growing at 31% in 2026 — but one analyst is modeling a path to 50%
Alphabet Inc.’s cloud-computing business might be the smallest out of the major hyperscalers, but it’s on track to narrow the gap faster than expected, according to Morgan Stanley analyst Brian Nowak.
Among the “Big Three” cloud-computing providers, Google Cloud Platform trails Amazon.com Inc.’s AWS and Microsoft Corp.’s
Azure in market share. Yet artificial intelligence could shake up the rankings as Google wins big deals, such as its recent cloud partnership that provides Anthropic with access to its custom tensor processing units.
While Nowak’s base case anticipates Google Cloud revenues growing around 44%, he wrote in a Wednesday note that the business could potentially achieve over 50% growth in 2026 if more large-scale cloud deals are signed. That’s significantly higher than the Wall Street consensus, which according to FactSet is only anticipating 31% cloud growth next year.
While the bull case may seem extreme, the Morgan Stanley analyst believes it’s a very achievable goal based on his Google Cloud revenue forecast. He breaks the segment’s revenues down into cloud backlog, referring to the unrecognized revenue from long-term contracts, and on-demand, or the pay-as-you-go business.
Nowak estimates that Google Cloud will add $106 billion in net backlog and grow its on-demand business at a 25% rate for 2025. Google Cloud would only need to add $50 billion in net backlog and achieve 15% growth in its on-demand business to grow at 50% in 2026. Or, if the on-demand business continues to grow at 25%, just a $20 billion increase in net backlog could result in over 50% cloud growth....
....MUCH MORE
And at VentureBeat, November 6:
Google debuts AI chips with 4X performance boost, secures Anthropic megadeal worth billions
Google Cloud is introducing what it calls its most powerful artificial intelligence infrastructure to date, unveiling a seventh-generation Tensor Processing Unit and expanded Arm-based computing options designed to meet surging demand for AI model deployment — what the company characterizes as a fundamental industry shift from training models to serving them to billions of users.
The announcement, made Thursday, centers on Ironwood, Google's latest custom AI accelerator chip, which will become generally available in the coming weeks. In a striking validation of the technology, Anthropic, the AI safety company behind the Claude family of models, disclosed plans to access up to one million of these TPU chips — a commitment worth tens of billions of dollars and among the largest known AI infrastructure deals to date.
The move underscores an intensifying competition among cloud providers to control the infrastructure layer powering artificial intelligence, even as questions mount about whether the industry can sustain its current pace of capital expenditure. Google's approach — building custom silicon rather than relying solely on Nvidia's dominant GPU chips — amounts to a long-term bet that vertical integration from chip design through software will deliver superior economics and performance....
