Hyperscalers Can Make/Break This Market

Alphabet and its hyperscaler peers face heightened scrutiny as Q2 earnings test their ability to balance capex and ROI. Capex for hyperscalers is projected to reach ~$750B in 2026, driving free cash to multi-year lows and prompting equity and debt financing. However, market sentiment is shifting as hyperscalers signal potential capex discipline, with consensus expecting free cash growth to resume by 2027-2028. I am turning bullish on hyperscalers and semiconductors, viewing the S&P 500 as attractive with forward earnings growth in the mid-twenties.

Alphabet Inc. (GOOGL), the first of the Big 4 hyperscalers, reports Q2 earnings today, after the bell. The expectations on Alphabet and its Big 4 hyperscaler peers are enormous because the Q2 earnings reports should offer some answers