NEW YORK, May 29, 2026, 19:03 (EDT)
- Alphabet Class A shares slipped $9.79 to $380.34, off around 2.5%. Nasdaq edged up 0.2%.
- Truist lifted its Alphabet price target to $430 from $415 on Google Cloud demand.
- New Google Cloud deals and an Indian court decision put attention on growth and regulatory risks.
Alphabet Inc. dropped on Friday, falling behind gains in the Nasdaq. Analysts have been more positive about Google Cloud and Alphabet’s AI push, but Class A shares slipped $9.79, or roughly 2.5%, to $380.34. Volume topped 44 million shares.
The move stood out as it ran counter to the day’s broader tech action. The Nasdaq Composite edged up 0.2% to 26,972.62. The S&P 500 also gained 0.2% and locked in a ninth week of gains, supported by fresh excitement over AI-related earnings.
Alphabet isn’t trading like only a search and ad firm. Investors are watching if Google Cloud can grab more of the enterprise AI market, even as Alphabet pours money into data centers and chips to keep it running.
Truist’s Youssef Squali bumped his Alphabet price target up to $430 from $415 and left his Buy rating unchanged, saying Google Cloud revenue estimates are still “below what they should be.” He sees Google Cloud sales growth picking up from 63% in Q1 to somewhere in the mid-80% range by the end of 2026, TipRanks/The Fly reported. TipRanks
Bulls picked up on some new company headlines. EQT, the Swedish private equity group, struck a deal with Google Cloud to roll out AI tools across more than 300 firms in its portfolio. That includes bringing in the Gemini Enterprise Agent platform and cybersecurity offerings. “Future-proof their businesses,” was how Bert Janssens, EQT’s co-head of private capital in Europe and North America, put it. Reuters
Google Cloud beat expectations in the first quarter, with revenue up 63% to $20 billion, ahead of analyst forecasts for 50.1% growth. CEO Sundar Pichai said enterprise AI tools are now the main growth driver for the cloud business, a first for the unit. That deal came after Alphabet reported those April numbers.
Google Cloud still faces tough rivals. It’s not as big as Amazon Web Services or Microsoft Azure, but first-quarter growth topped AWS’s 28% and Azure’s 40%. Google also started selling its custom AI chips, called tensor processing units or TPUs, to some customers. The chips go up against Nvidia’s graphics processors.
Alphabet raised its 2026 capital spending target to $180 billion to $190 billion, a big number covering data centers, servers and chips. Thomas Monteiro, senior analyst at Investing.com, said the target is “well within the company’s spending power” based on Alphabet’s cloud revenue growth. Reuters
Alphabet faces backlog questions too. Backlog—a contracted business that hasn’t hit revenue yet—almost doubled quarter-on-quarter, hitting $460 billion for the cloud unit. CFO Anat Ashkenazi said Alphabet plans to recognize a bit more than half of that in the next 24 months.
But it’s not a one-way bet. Big AI spending raises the stakes if enterprise demand cools, if cloud clients hold off on projects, or if investors want quicker returns. There’s also the risk from regulation. Reuters said Friday an Indian court ruling on keyword ads—ads triggered by certain search words or brands—might reshape online advertising. Shaadi.com’s Anupam Mittal said it “could change the economics” of the business. Reuters
Alphabet is stuck between what it’s always been—ads, court cases, regulators—and what it wants investors to see: a cloud and AI competitor to Amazon, Microsoft and Nvidia. That bet costs more.
