The Cloud Giants Are Slowing Down
Four of the biggest purchasers of servers in North America are Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN). These cloud giants and their rapid growth have been a major source of demand for companies that make components that go into those servers. In 2022, for example, Meta ramped up its server procurement quantities by nearly 20%, according to TrendForce.
Times are now changing. An uncertain economy is leading all four cloud giants to pull back on server purchases in 2023. Microsoft and Amazon have already warned that demand for cloud computing services is slowing as customers look to slash cloud bills and optimize usage, while both Meta and Google are feeling the impact of a slumping e-commerce market.
For 2023, Meta now reportedly plans to reduce server procurement by around 3% compared to 2022. Microsoft will aim to grow procurement by 13.4%, down from a 17.6% growth rate in 2022, while Alphabet and Amazon are planning to boost purchases by 5.2% and 6.2%, respectively. Notably, Amazon's growth rate in 2023 will be less than half of what it was in 2022.
Source Fool.com
