WSS: Earnings seasons shows growth acceleration across the board as CoreWeave moves global expansion to APAC in pursuit of land and energy in a constrained environment
It was a busy week across the sector as earnings season was in full swing. The US-based hyperscalers have now all reported and we saw consistent revenue growth acceleration across Oracle, Google, Amazon, Microsoft and Meta, along with ongoing CapEx investments. Amazon and Microsoft both saw material acceleration, with AWS seeing a particularly significant uptick, turning in 37% y/y growth and reaching over $42b in revenue in 2Q26. AWS added $4.6b of revenue in the quarter alone. Microsoft also showed growth acceleration for the Azure cloud infrastructure business, with the quarterly y/y growth rate reaching 43%. Microsoft Azure passed $100b in annual revenue during the recently completed fiscal year. Overall demand for cloud infrastructure and AI services remains strong and is consistently exceeding the ability of hyperscale platforms to serve it. And that is what is now an increasingly critical determining factor behind overall performance: the ability to bring capacity online and deliver it to customers. Microsoft claims to have deployed about 1GW of capacity in the quarter and is focused on improving operational processes so that it can build up more inventory. AWS is committing even more CapEx and raised its 2026 CapEx guidance from $200b to $220b, though a lot of this was due to the rising price of memory. Even with all the investments, management at AWS noted that it will continue to be short on supply for the near-term. Both Amazon and Microsoft saw backlog and RPO numbers climb as well, speaking further to where things have been trending.
The week also saw a number of neoclouds and webscalers report and we will have details next week. We did take a closer look at the results from data centre segment, including bellwether Equinix, along with American Tower’s CoreSite and Applied Digital. Equinix continues to see healthy growth and is growing the hyperscale business, while CoreSite is pushing forward as well. Applied Digital is a younger data centre business, but is starting to enter a period of accelerated growth as it ramps up CoreWeave in North Dakota and now has two other hyperscale tenants. The last quarter saw Applied Digital sign a number of long-term colocation leases and it now has in excess of 1.42GW of capacity leased across two geographies within its portfolio. Healthy levels of data centre growth should not be come as a surprise given the health of hyperscale cloud and AI infrastructure, which creates demand for flows directly through the data centre ecosystem.
CoreWeave is a significant hyperscale and neocloud driver of data centre demand, and it is seeing its expansion activity move outside the US into global markets. CoreWeave had started to land in Europe and it has been a matter of time before it starts to set up infrastructure in the APAC region. The question has always been when and where. Both those questions were answered in the past week as CoreWeave confirmed it will build out 360MW of capacity in Indonesia. The answers to the questions of when and where were a bit of a surprise. First, the timing. CoreWeave is projected to bring its infrastructure online in APAC some time in 2028, but an agreement signed this year was probably ahead of schedule for most observers, including us. Second, the choice of Indonesia as a first landing spot in APAC was also unexpected. AI infrastructure has been building out in Malaysia and Thailand, extending out of Singapore, and Indonesia has trailed. It has not been the first choice in Southeast Asia, let alone the entire APAC region. But the availability of resources and likely a data centre partner able to deliver, moved the needle. The choice of Indonesia resets some of the regional dynamic that are happening, and confirms what is increasingly happening these days: infrastructure is going to where the power is, and it can override other considerations that have previously been challenges, stumbling blocks or even barriers. Hyperscale cloud built out in APAC in predictable locations: Singapore, Tokyo, Sydney and Hong Kong. AI infrastructure will not likely follow the same pattern and the CoreWeave deployment is a case in point. It bypassed all four of those locations (with Singapore generally being a no-fly zone) and the two more popular ones in Southeast Asia.
Speaking of Indonesia, the Batam market, which is situated in close proximity to the SIJORI triangle, along with Singapore and Johor, is starting to see momentum. There is plenty of chatter about a US hyperscale and neocloud deployment that is in the dozens if not hundreds of megawatts. And another neocloud is set to land in Batam, with Australia’s Firmus partnering with DayOne on a 360MW AI data centre campus. The past week also saw some notable strategic activity. The AIP consortium completed its acquisition of Aligned Data Centers, while in APAC, Singaporean operator Racks Central recently received a significant investment to build a hyperscale data centre in Johor, Malaysia, and Indian real estate firm Anant Raj spun out a data centre and cloud infrastructure business called Ashok Cloud.
The past week also saw some notable strategic activity. The AIP consortium completed its acquisition of Aligned Data Centers, while in APAC, Singaporean operator Racks Central recently received a significant investment to build a hyperscale data centre in Johor, Malaysia, and Indian real estate firm Anant Raj spun out a data centre and cloud infrastructure business called Ashok Cloud.
or