SEOUL & SILICON VALLEY — Concerns over an impending ‘peak-out’ in artificial intelligence (AI) investments and the memory semiconductor business cycle were decisively shattered on July 23 as South Korea’s benchmark KOSPI index staged a dramatic relief rally. Reclaiming the psychological 7,000 threshold for the first time in five trading sessions, the index jumped 4.40% (299.19 points) to close at 7,096.89, propelled by massive foreign capital inflows following Alphabet Inc.’s stellar quarterly earnings and expanded capital expenditure (Capex) guidance.

Foreign investors, returning in full force to the Seoul exchange, extended their net buying streak to a fourth consecutive day. Offshore funds snapped up ₩2.15 trillion ($1.55 billion) worth of equities during the session, bringing their cumulative four-day purchase total to approximately ₩5.6 trillion. Institutional investors added ₩98.6 billion in net buys, while retail traders took advantage of the surge to lock in profits, offloading ₩2.21 trillion.

Semiconductor Titans Lead Foreign Buying Spree

The brunt of foreign purchasing power was heavily concentrated in the high-performance memory and technology sectors, which had suffered sharp valuation pullbacks in recent weeks due to macroeconomic anxiety regarding hyperscaler spending cutbacks.

SK Hynix: Absorbed ₩1.32 trillion in net foreign buying—emerging as the single most purchased stock on the Korean exchange—and surged 4.86%.
Samsung Electronics: Recorded ₩351.5 billion in net foreign buys, closing up 3.65%.
Together, these two semiconductor giants accounted for more than 75% of total foreign net purchases for the day, demonstrating strong institutional conviction in the High Bandwidth Memory (HBM) and enterprise DRAM recovery.

Alphabet’s Capex Guidance Boost Resets Market Narrative

The primary catalyst for the global rally originated overnight from Mountain View. Google’s parent company, Alphabet Inc., reported Q2 2026 financial results that comfortably topped Wall Street estimates on both revenue and net income. Crucially for hardware vendors, Alphabet revised its full-year 2026 Capex guidance upward to $195 billion – $205 billion (approx. ₩288.4 trillion – ₩303.2 trillion), up significantly from its prior forecast of $180 billion – $190 billion. Management further signaled that capital expenditure for AI compute and data center infrastructure in 2027 would expand even more aggressively.

During the earnings conference call, Alphabet executives emphasized that generative AI applications remain in their early deployment stages, with client demand consistently outstripping server capacity. Despite tripling its data center footprint and custom silicon deployments over the past three years, the company noted that supply bottlenecks persist, leaving no alternative but to scale up infrastructure investments continuously.

"This earnings report delivered exactly what the market desperately needed: clear evidence of AI investment continuity and concrete monetization metrics," noted Soo-Keung Hwang, Senior Analyst at Meritz Securities. "Persistent supply constraints paired with an expanded Capex commitment create an exceptionally favorable environment for memory semiconductor providers."

Broader Tech Outlook & Industry Context

Prior to Alphabet's announcement, global semiconductor equities had faced mounting downward pressure amid growing market skepticism that big tech companies might pare back capital budgets as revenue realization lagged hardware acquisition costs. Alphabet’s aggressive stance effectively eliminated fears of a premature downturn in the high-performance memory market.

Young-Min Ko, Senior Research Analyst at Daol Investment & Securities, highlighted the structural significance of the update:

"We have received explicit confirmation regarding the official investment trajectory of key hyperscale clients who dictate downstream semiconductor demand. This firmly establishes a structural bottom for memory stock valuations and prepares the sector for a robust, sustained rebound."
In an equity research report published the same day, KB Securities identified Samsung Electronics as the premier beneficiary of Google's expanding AI ecosystem, citing Samsung's dominant position as the primary memory supplier for Alphabet’s global server infrastructure.

Market attention now pivots to upcoming Q2 earnings releases from Microsoft and Meta Platforms (both scheduled for July 29) as well as Amazon (July 30). Global analysts widely expect these tech giants to echo Alphabet’s bullish outlook on AI infrastructure spending, further solidifying the multi-year supercycle for high-bandwidth memory (HBM) and next-generation storage solutions worldwide.

[Copyright (c) Global Economic Times. All Rights Reserved.]