'The AI trade is still on': Wall Street sees Big Tech's spending as positive for semiconductor stocks - Yahoo Finance

What the report says

Yahoo Finance reported that Wall Street analysts continue to view heavy spending by major technology companies as a support for artificial intelligence infrastructure stocks, especially semiconductors. The latest example was Alphabet, which disclosed with its second-quarter earnings that it had already spent more than $78 billion in the first half of 2026 and now expects full-year capital expenditures of $195 billion to $205 billion. The spending is tied largely to data centers, networking and custom silicon for Google’s AI and cloud needs.

The report said investors are increasingly distinguishing between the companies funding AI buildouts and the suppliers benefiting from that spending. While Alphabet and other large technology shares fell after earnings, several memory-related names, including Micron, SK Hynix and Sandisk, rose. Yahoo Finance also cited Intel’s stronger-than-expected quarter and improving investor sentiment around demand for processors used in AI-related workloads.

Market strategists quoted by Yahoo Finance said hyperscalers such as Google, Amazon, Meta and Microsoft are spending more aggressively than expected, creating opportunities for chipmakers, networking firms and data center providers. The PHLX Semiconductor Index was reported to be below its June peak but still sharply higher for the year and over the prior 12 months, outpacing the broader S&P 500.

The article also noted risks. Higher interest rates could weigh on high-growth companies and make borrowing more expensive, while upcoming results from other tech giants may add volatility. Several strategists advised against treating all AI-related semiconductor stocks alike and recommended diversified exposure across the AI supply chain rather than concentrating on a single theme.