The Korean investor Meru flags the week's one calendar entry that actually matters: Alphabet's Q2 results, out after the US close on July 22 (conference call 5:30am Korea time on the 23rd). Forget the profit number, he says, the market is quietly starting to doubt whether the hyperscalers will keep spending on AI infrastructure above today's pace, and Alphabet, the first of the big four to report, is where that doubt gets tested. Google, Microsoft, Meta and Amazon together spent about B on AI capex in 2025, a figure expected to swell to roughly B in 2026, and how much they commit is what moves Samsung, SK Hynix and the whole Korean market. Meru watches three things on the call: whether Alphabet keeps 2026 capex guidance at \80-190B (up from .4B in 2025, nearly double); whether CEO Sundar Pichai repeats his Q1 'compute constrained' line; and whether the cloud order backlog grows from Q1's 2B, a proxy for lasting memory demand. The catch is free cash flow: in Q1, .8B of operating cash flow minus .7B of capex left just .1B, down from \9B a year earlier. His warning case is TSMC: record Q2 numbers on July 16 (revenue .2B up 36%, a 67.7% gross margin) still sent the stock down, because Q3 margin guidance of 65-67% disappointed a market priced for perfection. Alphabet faces the same bar, good news is assumed, and any small stumble gets amplified.
Why it matters · Alphabet's capex line, not its profit, is what tells memory investors whether the AI spending cycle keeps running.
Worth asking · If Alphabet holds capex guidance but free cash flow keeps shrinking, is the AI buildout a sign of strength or overreach?