WSS: Tail end of earnings maintains patterns in place with more expansion activity driven by hyperscale and neocloud demand
We have moved through the bulk of earnings season and Alibaba Cloud was the latest hyperscale cloud to report in the past week. Alibaba Cloud looks to now be squarely in a recovery phase and is seeing revenue growth acceleration regularly on a sequential basis. Growth continues to be propelled by Ai service uptake and this is clearly having a positive spin-off effect for raw cloud infrastructure expansion. The combination is pushing the needle for hyperscalers and it has shown in the results. Alibaba was the last of the publicly listed hyperscalers to report in the 2Q25 period, but Oracle is set to report this week given its different reporting cycle. We will have more details next week, but expect Oracle Cloud to also show revenue growth acceleration on a sequential basis.
We mentioned last week how earnings season reflects the widening scope of the infrastructure ecosystem. Energy companies are now sources of important data points that help triangulate cloud and data centre demand, and the same can be said for the semiconductor companies. In the past week, we took a look at the earnings coming from Intel and AMD. NVIDIA also reported its latest quarter’s earnings and did extremely well (we will have more details next week).
Data centre build and expansion activity remain strong indicators for the state of demand and there were a number of developments worth pointing to. Applied Digital recently won a large deal to host CoreWeave at its Polaris Forge 1 data centre in North Dakota and confirmed it is now going to break ground on Polaris Forge 2, also in North Dakota. Applied Digital reported it is talking to multiple prospective hyperscale customers and it seems very possible it will add a second major customer to its roster. Meanwhile in Iceland, Crusoe Cloud took down more capacity in Iceland with atNorth and EdgeConneX acquired a second data centre site in the Osaka, Japan market.
Elsewhere in APAC, still emerging Bangkok continues to see a wave of new market entry as Thailand is expected to be a logical destination in the region for GPU-based workloads, particularly those coming out of China. And perhaps not surprisingly, Chinese data centre companies are getting into the act as well. Galaxy Data Centers, with roots in China, confirmed plans to enter the market and build a data centre campus in partnership with locally-based Silicon Tech Park in the EEC region to the southeast of Bangkok.
Finally, there was more strategic activity as organizations continue to use M&A to optimize focus and concentrate on core competencies. Hivelocity sold data centre assets in a couple of Digital Realty data centres to the landlord, atNorth sold its cloud infrastructure assets to Advania to focus on data centre colocation and we saw Yondr exit a JV in India.
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