After a slight dip in the first two quarters of 2019, hyperscale operator ramped up capex spending in the third quarter, representing a significant return to growth as hyperscale capex is now ahead of the record-setting levels seen in 2018, according to the latest numbers from Synergy Research Group (SRG).

Hyperscale operators spent more than $31 billion on capex in Q3, which was a significant increase from the $26 billion spent last year. According to Synergy’s research, the biggest hyperscale spenders in Q3 were Amazon, Google, Microsoft, Facebook, and Apple, whose capex budgets far exceeded other hyperscale operators. With the exception of Apple, the other four leaders saw a big year-on-year increase in capex spending in Q3.
Much of that hyperscale capex goes toward building, expanding, and equipping huge data centers, which Synergy's report noted now total 504.

The firm's research is based on analysis of the capex and data center footprint of 20 of the world’s largest cloud and internet service firms. This includes the largest as-a-service operators, search, social networking, and e-commerce. Outside of the top five, other leading hyperscale spenders included Alibaba, Baidu, IBM, JD.com, NTT, and Tencent.

“As expected there was a significant boost in capex in the third quarter, after a couple of quarters that were relatively soft in comparison with the lofty heights achieved in 2018,” said John Dinsdale, chief analyst at Synergy Research Group. “Hyperscale companies are in growth mode and revenue growth rates remain in strong double-digit territory, with aggregated Q3 revenues up 14% over 2018. Amazon, Google, Facebook, and Alibaba are all growing much more rapidly than that. These expanding companies are highly reliant on bigger and better data center operations, which will drive continued growth in capex levels.”