Alphabet and Intel reports this week could clarify whether AI-driven market gains are sustainable or due for a correction.
Alphabet and Intel will release second-quarter earnings this week, offering contrasting perspectives on the AI boom. Alphabet, a major AI infrastructure buyer, and Intel, aiming to expand as a supplier, face high market expectations amid a recent pullback in AI-related stocks.
The S&P 500 is projected to post 26% earnings growth for the quarter, while the Philadelphia Semiconductor Index remains up over 60% in 2026 despite a 20% drop from its June peak. Overseas chipmakers’ strong results have failed to lift sentiment, shifting investor focus to whether AI demand can outpace already elevated forecasts.
Alphabet’s report on July 22 will test whether its AI investments deliver returns. First-quarter revenue rose 22% to $109.9 billion, with Google Cloud revenue surging 63% to $20 billion. However, rising capital expenditures, which hit $35.7 billion, underscore the growing cost of sustaining growth.