Alphabet (GOOGL) and Intel (INTC) will approach second-quarter earnings from opposite sides of the artificial-intelligence boom.
Alphabet is one of the biggest infrastructure buyers in the industry. Intel is trying to prove it can be a bigger supplier to that build-out.
Their reports together could help decide whether the AI trade’s recent slide is a buying opportunity or the start of a wider valuation reset.
The market’s expectations are unusually high. S&P 500 earnings are expected to rise 26% during the second quarter, while the Philadelphia Semiconductor Index remains up more than 60% in 2026 despite falling over 20% from its late-June record.
Even strong results from major overseas chipmakers are producing muted stock reactions.
That means the question has shifted. Investors are no longer asking if there is demand for AI. They’re asking if it can continue to beat forecasts that already assume exceptional growth.
Alphabet must prove its AI spending produces returns
Alphabet reports results Wednesday, July 22, officially one of the most important days for the tech world.
The Google parent enters the quarter with a lot of momentum. Revenue for the first quarter grew 22% to $109.9 billion, and Google Cloud revenue grew 63% to $20 billion. Revenue from search rose 19%, suggesting that the AI features haven’t hurt the advertising engine that is funding Alphabet’s growth.
But the investment needed to sustain that growth is getting huge.
Alphabet’s capital expenditures were $35.7 billion in the first quarter, more than double what it spent a year ago. It plans to spend $180 billion to $190 billion in 2026 as it builds out servers, networking equipment, and data centers.
Related: Intel and Google deepen AI ties for chip design
That creates a difficult earnings test.
A reduction in planned spending could hurt Nvidia, memory suppliers, data-center companies, and other businesses relying on hyperscaler demand. If the company continues to spend aggressively without commensurate cloud and advertising growth there could be concern on returns on capital.
So, Alphabet needs to prove both sides of the AI equation: infrastructure investment growth and faster monetization.
Intel must prove its rally reflects business improvement
Intel reports Thursday, July 23, after its shares gained more than 160% in 2026.
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The company’s first-quarter results provided reasons for optimism. Revenue increased 7% to $13.6 billion, while Data Center and AI revenue rose 22% to $5.1 billion. Intel Foundry revenue advanced 16% to $5.4 billion.
The economic outlook remains complicated.
The company reported a GAAP net loss of $3.7 billion, including some items excluded from its adjusted results. Management expects second-quarter revenue of $13.8 billion to $14.8 billion and non-GAAP earnings of 20 cents per share.
Intel has to show that its stock rally is driven by more than AI server excitement and domestic chipmaking.
Investors will want to see proof that the stronger processor demand can help margins and that the foundry operation is moving toward sustainable external business rather than just generating more internal revenue.
What AI investors should watch
Alphabet’s capital spending forecast will be the most important demand signal to the market.
Google Cloud growth, backlog, margins, and management commentary on available compute capacity are also things investors should consider. Capacity shortages continue to underpin demand for chips, while slower cloud growth may raise questions about the eventual return on investment in infrastructure.
For Intel, data center and AI growth, foundry economics, and third-quarter guidance will matter more than a narrow earnings beat.
The semiconductor index tanked in July, a sign that good numbers may no longer be enough. The chip companies are predicted to have 133% earnings growth in the second quarter and will be responsible for 44% of the S&P 500’s profit expansion.
Key takeaways for investors
- Alphabet reports Wednesday, followed by Intel on Thursday.
- Alphabet’s spending plans affect demand across the AI supply chain.
- Intel must justify a stock gain exceeding 160% this year.
- Cloud growth and foundry margins may matter more than headline earnings.
- Strong results could still disappoint if guidance does not exceed elevated expectations.
Alphabet and Intel don’t have to prove the AI boom is real.
The market has already factored in that conclusion.
Alphabet needs to demonstrate that all those giant investments in infrastructure are yielding revenue and profit fast enough to justify more expansion. Intel must show that the boom is spreading beyond the top graphics-chip makers and that its core operations are improving.
That’s why these earnings could be a two-stock move.
They will test if the AI really still has room to expand or whether expectations have finally outstripped the companies themselves.
Related: Alphabet stock rally exposes Google’s unusual AI problem
