New York, June 1, 2026, 14:18 EDT
Alphabet shares slipped roughly 1.1% as of Monday afternoon, underperforming the QQQ ETF, which was up 0.9%. GOOGL, Alphabet’s Class A stock, last traded at $376.26. Class C shares, GOOG, saw a similar drop.
Alphabet is now viewed as a clear gauge of the market’s AI bet. Investors want to see if artificial intelligence—tools that create or read text, images, or code—can keep powering Google Search and Google Cloud at a strong enough pace to cover the company’s rising spending on infrastructure.
Piper Sandler’s Thomas Champion lifted his price target on Alphabet to $445 from $425 on Monday, keeping his Overweight call on the stock. Overweight says Champion expects the shares to outperform. He pointed to Google as the “clear beneficiary” from AI Search growth after looking at citation data in Google AI Overview and AI Mode, according to TipRanks. TipRanks
Truist kept a positive view too. Analyst Youssef Squali bumped his Alphabet target to $430 from $415, according to Investing.com. He said the consensus estimate for Google Cloud revenue was “below what they should be” and pointed to backlog and recent wins. Investing.com
Bullish investors point to Alphabet’s April report, where first-quarter revenue climbed 22% to $109.9 billion. Google Cloud was up 63% at $20.0 billion. CEO Sundar Pichai said AI investments are “lighting up every part of the business.” The company also said Cloud backlog was almost twice what it was last quarter, now above $460 billion.
Still, the bill is big. After Alphabet’s earnings, Reuters said CFO Anat Ashkenazi put the company’s 2026 capex outlook at $180 billion to $190 billion. That’s spending on things like servers and data centers. Google has also started selling its own AI chips, called Tensor Processing Units, or TPUs. That move puts Google in the AI chip race with Nvidia, even as its cloud business still runs on Nvidia GPUs.
Nvidia climbed 6.2% and Microsoft added 2.2%. Amazon dropped 3.1%. Alphabet shares stuck near the cloud spend story, not the chip gains.
Regulation is in focus again after Reuters said Monday that new draft EU cloud rules could put tough criteria on key state contracts, possibly barring Amazon, Microsoft and Google from certain deals. The draft is tied to the Cloud and AI Development Act, part of a move by the EU to cut back on U.S. tech suppliers.
DuckDuckGo is seeing a spike in users on its “no-AI” search. TechCrunch said traffic to that search page jumped three times on May 28 and has stayed up, averaging 84% over normal since Google’s AI-search changes. DuckDuckGo responded by making the “no-AI” version easier to find. TechCrunch
But there’s a clear downside. Stricter EU procurement rules might close off certain cloud deals, less interest in AI search answers could dent engagement, and planned capex of nearly $190 billion would hit cash flow if growth tapers. Monday’s buyers still saw that risk.
Investors are looking at two dates. EU tech chief Henna Virkkunen plans to announce the cloud package Wednesday. Alphabet’s annual meeting is on Friday at 9 a.m. Pacific.
Wall Street upgrades didn’t stop Alphabet from missing out on the wider tech rally. The stock is still part of the AI story, but Monday’s trading showed it’s also exposed to the costs of that push.
