The latest capital spending forecasts from big tech companies have alarmed investors. but,If you dig deeper into these superficial numbers, you'll find that actual capex growth is likely to be much slower.. That's according to a new research note released Monday by analysts at RBC Capital Markets.
Amazon, Google, Meta and Microsoft expect to spend nearly $600 billion this year on data centers, chips, networks and other related equipment to meet growing demand for artificial intelligence (AI).
On the surface, this seems to be an investment frenzy that continues to accelerate, but RBC’s analysis points out thatThese growth figures are actually "beautified" by an unusual factor: the skyrocketing price of memory.
RBC analysts found thatSoaring prices for data center memory chips — including dynamic random access memory (DRAM), high-bandwidth memory (HBM) and NAND flash — could account for about 45% of total cloud capital spending growth in 2026.
The key, analysts say, is that this growth is not primarily due to companies massively increasing their hardware purchases, but rather from paying higher prices for the same components.
The bank predicts that data center memory spending by the world's top ten cloud vendors will surge from approximately US$107 billion in 2025 to approximately US$237 billion in 2026. This $130 billion increase accounts for approximately 45% of the total capital expenditure growth of these companies.
What's more noteworthy is that about three-quarters of the increase in memory spending (nearly $98 billion) comes purely from price increases, rather than increased purchase quantities.
Memory prices have risen at an alarming rate: RBC quoted TrendForce's predictions that DRAM prices will double in 2026, and NAND flash memory prices are expected to rise by more than 85%. Memory has become one of the most scarce components in AI infrastructure—advanced GPUs require large amounts of high-performance DRAM and HBM, while AI data centers consume huge amounts of flash memory.
If memory costs are taken out of the equation, the capital spending picture for tech giants looks completely different.
RBC calculation,After excluding memory costs, capital expenditure growth in 2026 is expected to drop sharply from about 80% in 2025 to about 40%. Although the growth rate is still strong, it is nowhere near as rapid as the surface capital expenditure data indicates.
Analysts described this as a "significant slowdown" but added that "there is no need to panic about this."
RBC said AI investment fundamentals remain solid and warned that memory prices are currently the biggest variable affecting capital spending trends heading into 2027.