Chip stock rout sends investors rushing back to bruised Alphabet stock

Chip stock rout sends investors rushing back to bruised Alphabet stock Brian Sozzi · Executive Editor Tue, July 28, 2026 at 4:05 PM GMT+2 3 min read GOOG GOOGL With chip stocks extending their sell-off , investors have rotated back into safety in the Big Tech patch.   Believe it or not, that now includes Alphabet ( GOOG , GOOGL ), which is only a few days removed from its stock being hammered by fears of AI overspending.   Talk about a short memory.

Quick insight: Alphabet stock started Tuesday's session above the key 200-day moving average after closing above it on Monday, according to Yahoo Finance AlphaSpace data (chart below). The stock broke below the 200-day moving average for the first time in more than three years on July 23 as investors digested the company's second quarter numbers.   Alphabet stock crossed back above its 200-day moving average.

The 200-day moving average is one of the most widely followed technical indicators as it helps investors distinguish a stock's long-term trend from short-term market noise. A stock trading above its 200-day moving average is generally viewed as being in a long-term uptrend. A break below that level is often interpreted as a bearish signal that selling pressure is increasing and institutional investors may be turning more cautious.

Alphabet's second quarter capital expenditures came in at $44. 9 billion, slightly above Wall Street forecasts of $44. 7 billion.

Full-year capital expenditures guidance was raised to $195 billion to $205 billion from $180 billion to $190 billion, with a "significant" increase seen for 2027, executives said on the earnings call. Concerns about AI spending overshadowed a strong quarter for the company. The standout was Google Cloud , where revenue surged an eye-popping 82% to $24.

8 billion, while the company's cloud backlog ballooned to $514 billion, underscoring the enormous demand for AI infrastructure. A cyclist rides past signage at the Google headquarters in Mountain View, Calif. , on July 21, 2026.

(David Paul Morris/Bloomberg via Getty Images) · Bloomberg The backdrop: The rotation back into Alphabet is notable in light of the past 48 hours for the wider tech landscape. Semiconductor stocks are under intense pressure as investors have begun questioning whether the artificial intelligence spending boom has become overheated and have grown more concerned about rising competition from China. The fears intensified on Tuesday after the KOSPI ( ^KS11 ) plunged nearly 11%, its worst session in months, as memory chip giants Samsung Electronics ( 005930.

KS ) and SK Hynix ( SKHY ) suffered double-digit declines that rippled through the global semiconductor sector.   Adding to the anxiety were reports that China has made significant progress in memory chips through ChangXin Memory Technologies and in domestic lithography equipment, raising concerns that Chinese companies could become stronger competitors to established chipmakers. Story Continues Hot names in the US, such as Micron ( MU ) and Sandisk ( SNDK ), have been crushed to start the week.

Sandisk lost 11. 8% in Monday's session and is likely to see its declines extend today. Micron shed 3.

25% on Monday and is also under pressure in early trading today. The bottom line: Alphabet stock isn't out of the woods, and it could come back under pressure this week if capital expenditure plans by Amazon ( AMZN ), Microsoft ( MSFT ), and Meta ( META ) are painfully high when their second quarter earnings are reported. Proceed with caution.

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories?

Email brian. sozzi@yahoofinance. com.