NEW YORK, July 19, 2026, 3:09 p.m. EDT (U.S. markets closed) —
- The Philadelphia Semiconductor Index declined roughly 10% last week, closing 20.2% beneath its late-June peak.
- UBS Group NYSE:UBS forecasts a significant deceleration in hyperscaler spending growth after 2026.
- Alphabet NASDAQ:GOOGL and Texas Instruments NASDAQ:TXN are scheduled to report on Wednesday. Intel NASDAQ:INTC will release its results later in the week.
Chip buyers, rather than sellers, could deliver the next upside surprise in artificial intelligence. Alphabet is set to provide the most direct test when it announces results on July 22.
This is significant as the AI sector is up against two upcoming earnings challenges. Platform operators need to demonstrate that artificial intelligence generates income, while hardware providers must justify the growth expectations that are already reflected in their share prices.
UBS projects that hyperscaler capital expenditure will surge 76% in the current year to $673 billion. Growth is forecast to decelerate to 25% by 2027 and further to 6% in 2028. The anticipated slowdown may ease financial pressure on buyers, but is expected to limit growth for suppliers.
Trading on Friday revealed concentrated positions, with the S&P 500 slipping 1.0% to end at 7,457.69. The Nasdaq dropped 1.4%, closing at 25,520.24. Each of the three leading U.S. indexes posted weekly declines.
Chip stocks saw a more significant drop. The semiconductor index declined around 10% during the week. Even so, it is still up nearly 65% so far this year, although it has moved into correction territory.
A basic look at trailing earnings multiples highlights a possible shift in leadership. The median multiple for Alphabet, Amazon NASDAQ:AMZN, Microsoft NASDAQ:MSFT and Meta Platforms NASDAQ:META stands at 25.0 times.
The infrastructure sample posts a median of 57.0-times. The list features Nvidia, AMD NASDAQ:AMD, Broadcom NASDAQ:AVGO, Arista Networks NYSE:ANET, Vertiv NYSE:VRT, Texas Instruments, and Micron Technology NASDAQ:MU. The spread is 2.3 times.
| Company | Friday close | Friday move | Trailing P/E | Next investor test |
|---|---|---|---|---|
| Nvidia | $202.81 | -2.3% | 30.9x | AI-hardware performance test |
| Alphabet | $346.77 | -2.2% | 26.5x | July 22 earnings |
| Microsoft | $393.82 | -1.8% | 23.4x | July 29 earnings |
| Amazon | $247.23 | -1.0% | 29.6x | July 30 earnings |
| Meta Platforms | $646.01 | -2.8% | 23.5x | AI profitability versus investment |
| Micron Technology | $848.95 | -0.5% | 19.2x | Semiconductor cycle resilience |
| Intel | $95.04 | -2.1% | n.m. | Progress on recovery |
Friday’s movements are based on the most recent closing figures. Multiples are calculated with trailing earnings. Intel does not have a meaningful multiple as its trailing earnings are negative. Company statements have determined the reporting dates for Alphabet, Microsoft and Amazon.
Alphabet holds the most favorable near-term outlook. The company’s multiple of 26.5 times remains under Nvidia’s 30.9 times. Nonetheless, its shares declined 2.2% on Friday. Robust cloud growth could bolster the platform thesis provided spending does not accelerate further.
Kevin Mahn at Hennion & Walsh cautioned that any reduction in spending may trigger “ripple effects across the entire AI ecosystem.” As a result, Alphabet’s capital spending is significant for more than just its investors. Reuters
Microsoft and Amazon are scheduled to report next on July 29 and July 30. Microsoft trades at 23.4 times trailing earnings, while Amazon trades at 29.6 times. Meta, at 23.5 times, presents another test for lower-valued AI monetization.
Micron is considered the wildcard in hardware. Shares are valued at 19.2 times earnings and dipped just 0.5% on Friday. Options traders maintained bullish bets even as chips broadly declined. However, the low valuation could signal memory profits are peaking.
Intel is delivering the week’s biggest two-way surprise. Shares have climbed over 160% in 2026, even as trailing earnings remain negative. Texas Instruments is up around 60% and is trading at nearly 48.6 times earnings. Investors may find solid results insufficient.
The earnings bar remains steep. Of the first 49 S&P 500 companies to report, 90% have surpassed expectations. LSEG LON:LSEG is forecasting 26% growth in second-quarter earnings.
Toni Meadows at BRI Wealth said semiconductor valuations had “priced near-perfect demand.” That marks the core split. Platform stocks require evidence of profit, while suppliers depend on demand staying almost perfect. Reuters
Risks: Trailing multiples do not account for business mix or the quality of the earnings cycle. A significant reduction in capital spending may negatively impact cloud expansion, chip demand and overall sentiment.
Looking to the week ahead, Alphabet is viewed as the clearest upside opportunity. Intel presents higher volatility risks. Microsoft and Amazon are poised as further valuation-driven options.
