Nomura Securities: AI Capex Race Has No Exit Option, 2027 Storage Capacity Already Locked In

TechFlow reports that, according to Chaoxiang Research, Nomura Securities’ research report dated October 23, 2026, indicates Meta posted a negative free cash flow (FCF) of $2.1 billion in the third quarter, Alphabet posted a negative FCF of $5.9 billion in the second quarter, and Amazon recorded a negative FCF of $7.6 billion over the past 12 months; the combined capital expenditures of the top four cloud providers for 2026 will exceed $700 billion; the probability of the competition continuing is estimated at 75%, a slowdown at 20%, and financing failure at 5%.

Nomura Securities assesses that memory manufacturers have already locked in 2027 capacity during long-term contract negotiations in October, with breach of contract incurring penalties of 50% to 100% of the annual demand value, confirming the continuation of the memory supercycle. Shareholder pressure will slow capital expenditures but will not halt the competition. Only a closed financing market could stop the race, which Nomura Securities does not currently consider a systemic risk. Power bottlenecks primarily result in delays, postponing chip deliveries without canceling demand.