Kospi jumps 3% as Asian markets chase Alphabet’s $200B AI splurge

Asian stocks rose on Thursday as investors looked past mixed reactions to US technology earnings and focused on the scale of spending still flowing into artificial-intelligence infrastructure.

South Korea’s Kospi gained more than 3%, led by SK Hynix and Samsung Electronics, while Japan’s Nikkei 225 advanced about 1%.

MSCI’s Asia-Pacific index outside Japan also added roughly 1% and headed for its first weekly gain in three weeks.

The rally came even as Brent crude touched $96 a barrel and short-dated US Treasury yields climbed, leaving markets caught between an AI investment boom and a widening energy shock.

Alphabet’s capex surge revives the chip trade

Alphabet raised its 2026 capital-expenditure forecast to between $195 billion and $205 billion, increasing the midpoint by $15 billion as it races to add data-centre and computing capacity.

The revision followed a quarter in which revenue climbed 24% to $119.8 billion and Google Cloud sales surged 82% to $24.8 billion.

The spending surge unsettled Alphabet investors because free cash flow turned negative, but it provided a clearer boost for Asian suppliers of memory, foundry services and semiconductor equipment.

Allspring Global Investments portfolio manager Gary Tan said stronger cloud growth was validating heavier investment and suggested the hyperscaler spending cycle still had momentum.

Tesla offered a more cautious version of the same story.

Quarterly capital expenditure reached $5.8 billion and pushed free cash flow below zero, while the company maintained plans to spend more than $25 billion this year on AI infrastructure, robotaxis and robotics.

Oil shock challenges the earnings relief

The equity rebound unfolded against a worsening supply backdrop.

Brent rose 2% to $96 and WTI climbed 1.7% to $88.27 after a 12th consecutive night of US strikes on Iran and Houthi attacks on Saudi-linked tankers in the Red Sea.

Iran said the Strait of Hormuz was effectively closed without its approval, while the Houthi threat extended the disruption to Bab el-Mandeb.

A simultaneous interruption would threaten routes used for more than a quarter of global oil and gas shipments.

Macquarie strategist Thierry Wizman said concern about global growth was justified as higher fuel and transport costs threatened consumption and company margins.

The conflict is also rebuilding inflation pressure just as investors had begun to expect a gentler policy path.

Yen weakness exposes the policy gap

The yen traded near 163.1 per dollar after touching its weakest level since 1986, keeping traders alert to possible intervention.

Reports that Bank of Japan officials may consider faster rate increases offered only brief support.

OCBC strategists said intervention or stronger domestic buying by Japanese pension funds could slow the decline, but a lasting recovery would probably require a quicker BOJ tightening cycle.

Markets, meanwhile, priced about 42 basis points of Fed increases by year-end, with a September move fully reflected.

Asia’s chip rally therefore rests on a difficult bargain: earnings and investment must remain strong enough to outweigh oil-driven inflation, higher yields and mounting pressure on global growth.