Jefferies released a proprietary survey of U.S. CIOs that points to AI‑driven cloud demand as the main driver of growth. Respondents forecast 10% growth in cloud spend for 2025 and 2026, with 85% planning higher budgets next year. 83% expect more than half of workloads in the cloud by 2027, and 40% foresee penetration above 80%.

Within that backdrop, Jefferies singles out Microsoft and Alphabet as the clearest beneficiaries. Analysts note Azure dominates usage, cited by 45% of CIOs as the primary provider, and 60% expect Azure spend to rise over the next 24 months. Alphabet’s GCP shows a 52% net spending score, with 56% anticipating higher spend, driven by the Gemini AI dark horse.

These findings reinforce the narrative that hyperscalers will continue to capture AI‑related revenue, making them attractive to investors. As cloud budgets climb, regulatory scrutiny over data handling may intensify. Market watchers should track next quarter earnings for both firms, as shifts in spend could ripple across the broader tech sector.