New York, Feb 6, 2026, 09:32 EST — Regular session
- Alphabet Class C shares slip slightly as investors remain wary of Big Tech’s rising AI expenses.
- Wall Street is balancing robust cloud growth with a notable surge in capital spending.
- Upcoming macroeconomic data will focus on postponed U.S. jobs and inflation figures.
Alphabet Inc’s Class C shares (GOOG) dipped 0.5% to $331.33 in early Friday trading, having dropped as much as 2% to $326.44 earlier. The Invesco QQQ Trust, tracking the Nasdaq 100, tumbled 1.4%, while the SPDR S&P 500 ETF lost 1.2%.
The shift leaves Google’s parent caught in a familiar tug-of-war: investors appreciate the revenue growth, yet their tolerance for unchecked spending is wearing thin.
The market is now focusing more on the actual costs of the AI build-out, rather than just its potential. Traders want to see if the money spent on data centers and chips translates rapidly into cash flow.
Alphabet has set its 2026 capital expenditure forecast between $175 billion and $185 billion, a steep rise from the $91.45 billion planned for 2025 and well beyond Wall Street’s estimates. The boost aims to tackle bottlenecks in computing power, covering investments in servers and data centers. CEO Sundar Pichai told analysts, “We are seeing our AI investments and infrastructure drive revenue and growth across the board.” The company also posted December-quarter revenue of $113.83 billion, with cloud revenue surging 48% to $17.7 billion. A D.A. Davidson analyst noted this cloud growth was “importantly higher” than Microsoft Azure’s, marking a rare lead for Alphabet. 1
A filing revealed Alphabet’s board approved a quarterly cash dividend of $0.21 per share for Class A, B, and C stock, set to pay out on March 16 to shareholders registered by March 9. The release also highlighted a $16 billion investment round for Waymo announced in February, with Alphabet covering most of the funding. 2
It’s not just Alphabet rattling nerves. Amazon’s shares dropped 8% in premarket trading on Friday, following its forecast of a more than 50% increase in capex for 2026. Investors are spooked by the prospect that the AI spending race in the sector could dent profits in the short term. 3
Some investors are drawing clearer distinctions between “AI winners” and the rest. Bernstein analyst Mark Shmulik flagged that mega-cap tech firms are approaching a combined $1 trillion in 2026 investment once capex and staffing are included. Paul Meeks of Freedom Capital Markets noted a growing narrative favoring Google over OpenAI, despite the latter’s “eye-watering” spending outlook. 4
The downside is clear: if cloud demand slows, ad growth falters, or AI products take longer to generate steady cash flow, that spending plan could squeeze buybacks and weigh on margins. Supply constraints, which Pichai acknowledged the company still grapples with, add another layer of execution risk.
Traders are waiting for clearer signals on Alphabet’s spending pace and if its cloud growth will persist through the March quarter, all amid shifting rate expectations that add caution.
The next major market trigger is macroeconomic data: the postponed U.S. Employment Situation report for January will drop on Feb. 11, followed by January’s CPI report on Feb. 13. These releases were delayed by the recent government shutdown and could shift rate expectations, impacting valuations, especially for megacap tech stocks. 5
