Hyperscalers Microsoft, Amazon, Alphabet and Meta have maintained AI chip investments through H1 2026, propelling the Philadelphia Semiconductor Index up 81% in Q2 and 94% YTD. Last week's 7.9% index selloff underscores volatility risks to Alphabet’s infrastructure spending outlook.
Hyperscalers Microsoft, Amazon, Alphabet and Meta have kept aggressive AI chip spending through the first half of 2026, underpinning capital allocation toward data-center expansion and model training capacity.
The Philadelphia Semiconductor Index climbed 81% in Q2 and 94% year-to-date, driven largely by memory and storage demand, marking its strongest quarterly and YTD gains since the dot-com era.
Last week’s 7.9% index slide—its worst weekly drop since April 2025—followed by a 3.8% intraday rebound highlights increased trading volatility that could pressure infrastructure budgets.
Analysts question whether hyperscalers will extend or grow chip investments beyond 2026, introducing potential headwinds for Alphabet’s planned capital expenditures and AI roadmap.
