NEW YORK, Feb 7, 2026, 09:00 ET — The market is closed.
Alphabet (GOOGL.O) dropped another 2.53% to finish at $322.86 on Friday, marking its fourth day in the red. The Google parent’s ramped-up investment plans now hang in the balance, as investors try to gauge if appetite for its AI offerings will hold up. With U.S. markets quiet for the weekend, that question lingers. 1
It’s not just about one company. Alphabet, Amazon, Microsoft, and Meta are all ramping up AI spending, with the combined outlay for the group expected to top $630 billion this year. Alphabet? The company has flagged up to $185 billion in capex—funds headed for data centers, servers, and chips. Morgan Stanley analysts aren’t seeing much patience from investors when it comes to massive projects lacking a clear return on invested capital, that key profit-versus-cash-in metric. 2
Alphabet slipped 0.55% Thursday, its capex outlook weighing on the stock and dragging the Nasdaq as other tech giants also stumbled. “The market is still testing whether this investment will translate into results,” said Tom Hainlin, investment strategist at U.S. Bank Wealth Management. SimCorp’s Melissa Brown flagged AI as a double-edged sword—helping some firms, hurting others, with software especially exposed. 3
Friday’s action brought a shift. The Dow broke above 50,000, while the S&P 500 rallied hard—chipmakers were in demand, with the AI boom and fresh data-center spending in focus. Amazon, though, tumbled 5.6% after flagging a surge in expenses. “There’s real demand for AI products,” Baird investment strategy analyst Ross Mayfield said, noting that buyers often return to the trade after pullbacks. 4
Alphabet still finds itself in the middle of that tension as Monday approaches. Cloud and ad segments need to keep expanding, investors say, while the path from AI features to real revenue — not simply bigger expenses — remains a sticking point.
Investors keep circling the company’s cloud division—practically the main pillar of its AI story. The bet? Fresh workloads could mean lasting profits. Still, there’s a catch: infrastructure bills tend to balloon quickly, while price hikes and increased usage aren’t exactly sprinting to keep pace.
The risk isn’t complicated: rapid capex outpacing revenue, and suddenly free cash flow shrinks. High-multiple megacaps, they’re usually the first to catch the squeeze when rates jump or risk tolerance ebbs.
Alphabet’s stock heads back into focus once trading picks up, with investors eyeing whether it finds its footing after the recent drop—and whether capex goes back to being seen as a growth driver, or just a red flag.
Two big dates are looming for tech valuations this week: The Bureau of Labor Statistics drops the January jobs report on Feb. 11, and then follows up with January’s CPI inflation numbers on Feb. 13. Both reports hit at 8:30 a.m. ET. 5
