Google Throws a Lifeline! Memory Stocks Surge as SK Hynix and Samsung Drive Korean Market Rally

The highly anticipated latest earnings report from Google (GOOGL-US) not only exceeded market expectations in revenue and profit, but more importantly, the company raised its full-year capital expenditure guidance, injecting a strong shot of confidence into the recently corrected AI semiconductor and memory sectors. Market concerns that large cloud providers might slow AI investments due to financial pressure have significantly eased following Google’s signal of continued capital spending, offering a much-needed 'lifeline' to memory chip stocks that had recently faced heavy selling pressure.

Google's second-quarter Google Cloud revenue grew substantially, far surpassing market expectations. The company has now raised its annual capital expenditure forecast from the previous range of $180 billion to $190 billion to a new range of $195 billion to $205 billion, and further indicated that investment levels will continue to expand through 2027.

Earlier market rumors suggested Google might scale back AI infrastructure investments due to financial pressures, but the latest earnings report completely dispelled such speculation. Although the company's quarterly free cash flow turned negative due to sharply increased capital spending, it still maintains a strong base of free cash flow. It has completed equity and bond fundraising and established new financing mechanisms to continuously fund AI infrastructure development.

Another key factor supporting Google’s continued investment is the backlog of cloud business contracts—revenue already contracted but not yet recognized—surpassing $500 billion for the first time. This indicates that AI demand remains robust and strengthens market confidence in long-term investment returns.

AI Chip Demand Remains Strong—Memory Sector Breathes a Sigh of Relief

While concerns remain about whether massive investments in AI infrastructure can yield returns within a reasonable timeframe, and worries persist that declining free cash flow could suppress valuations, for the AI semiconductor supply chain, Google’s continued increase in capital expenditure signals sustained demand for related equipment and chips.

Driven by the massive capital spending of major tech companies—largely directed toward AI chips and computing power—AI semiconductor stocks rose broadly in after-hours U.S. trading. This included Nvidia, Broadcom, Micron, SanDisk, and SK Hynix, with memory-related stocks showing the most pronounced gains.

This wave of optimism quickly spread to Asian markets, triggering a broad rebound in memory chip stocks and providing temporary relief to market sentiment that had been weighed down by AI investment concerns. However, reports note that a true reversal in market sentiment will depend on whether other hyperscalers—Microsoft, Amazon, and Meta—also raise their capital expenditure.

SK Hynix and Samsung Lead Charge as Korean Market Soars

Spurred by Google’s announcement of higher annual capital expenditure, South Korea’s memory giants led the charge at the opening of Asian markets on Thursday (23rd).

SK Hynix and Samsung Electronics surged in early trading, and with these heavyweight stocks leading, the Korean KOSPI index briefly rose over 3%, making it one of the strongest-performing major markets in Asia. Japanese markets also strengthened in tandem, with the Nikkei 225 index posting a modest gain.

Market analysts widely view Google, as the first major U.S. tech company to report earnings this season, as a highly indicative bellwether. Management clearly stated that AI commercialization is still in its early stages and that the company will continue to invest as long as returns remain reasonable—rebuilding market confidence in the demand for AI infrastructure.

OpenAI and SpaceXAI Join the AI Arms Race

Beyond Google, OpenAI and SpaceXAI have also recently ramped up their investments in AI infrastructure.

OpenAI announced plans to build a large data center in Georgia, USA, with a planned power capacity of 3.2 GW and a total investment estimated at over $30 billion. It also raised its forecast for future cloud infrastructure spending to $750 billion, signaling that its long-term expansion plans remain on track.

Meanwhile, SpaceXAI is planning to build a large AI data center in Texas, evaluating new sites while also retrofitting existing facilities and continuously expanding its AI talent pool. Reports indicate that the company’s AI-related capital expenditure has already surged, with market estimates suggesting massive funding will be consumed between 2026 and 2027 due to AI infrastructure investments.

With Google leading the way in raising capital expenditure, and OpenAI and SpaceXAI continuing to pour resources into AI infrastructure, expectations for an ongoing AI arms race have intensified. This has temporarily supported the memory chip sector, which had been under pressure, and driven a strong rebound in South Korea’s semiconductor blue chips and the broader stock market.