Is Isaiah 53 talking about the Messiah or Israel?

The passage applies to the Messiah and not to Israel for several reasons:

1.  The Holy Spirit affirmed that Isaiah was talking about the Messiah (Acts 8:32-35).
2. The language of Isaiah 53 speaks of an individual person, not a nation (cf. 53:2-4; compare “he” of verse 2 to “my people” of verse 8).
3. The victim in Isaiah 53 is innocent (v. 9); the book of Isaiah as a whole shows Israel being guilty.
4. Isaiah’s victim passively endures the abuse heaped upon him (v. 7), but the nation of Israel fought for their survival to the bitter end.
5. The benefits of the death of the Individual in Isaiah 53 were passed on to others (vs. 5, 11-12).  The destruction of the Jewish nation held no such benefits.

Thus, Isaiah 53 is solely speaking of Jesus.