Asian chip stocks surge after Alphabet raises capex forecast

Asian semiconductor stocks rallied sharply on Thursday after Alphabet ↘ 1.24% raised its full-year capital expenditure forecast, reinforcing expectations that demand for AI infrastructure will remain robust despite broader market volatility.

AI Spending Surge Fuels Chip Rally

South Korea's Kospi surged more than 4% on July 23, led by memory chipmakers SK Hynix and Samsung Electronics, which climbed roughly 5% and over 3% respectively. Japan's Nikkei 225 advanced more than 1.1%, with chip-testing equipment maker Advantest gaining 4.4%.Investing.com+1

The rally was sparked by Alphabet's second-quarter earnings report on Wednesday, in which the company raised its 2026 capital expenditure guidance to between $195 billion and $205 billion, up from a prior range of $180 billion to $190 billion. The increase reflects continued aggressive investment in AI computing capacity, with roughly 60% directed toward servers and 40% toward data centers and networking equipment.The Star+1

Alphabet Delivers Strong Quarter Amid Capex Concerns

Alphabet reported quarterly revenue of $119.8 billion, up 24% year-over-year, with Google Cloud posting 82% growth. Capital spending in the quarter reached $44.9 billion, double the year-ago figure. Chief Financial Officer Anat Ashkenazi reaffirmed on the earnings call that the company planned another increase to capex in 2027.Investing.com+1

While Alphabet's shares fell in after-hours trading as investors weighed the spending surge against near-term profitability, the guidance sent a clear signal to Asian suppliers that AI-related hardware demand shows no signs of slowing.Investing.com

Relief for Markets After Brutal July

The rally provided relief for South Korean equities after a punishing stretch. The Kospi had suffered its worst monthly decline on record earlier in July, plunging more than 23% and triggering multiple circuit breakers before staging a partial recovery. Thursday's gains extended a rebound that began earlier in the week.CoinGape

Chinese AI-related shares bucked the regional trend and fell, with Semiconductor Manufacturing International Corp dropping 3.4% and Hua Hong Semiconductor slumping more than 6%, after the U.S. administration accused a Chinese AI firm of technology theft.Investing.com

Analysts said Alphabet's higher capex outlook eased fears of a semiconductor cycle peaking and reduced concerns that hyperscale cloud clients might begin cutting AI-related spending.The Business Times+1