NEW YORK, March 26, 2026, 2:45 PM EDT
Alphabet slipped roughly 3.1% to $280.53 in afternoon trading on Thursday, building on a 3.28% slide from earlier this week. Investors kept unloading the Google parent, rattled by concerns that its AI spending is ballooning beyond easy justification.
This shift is significant: Alphabet has stepped up from simply competing in AI to becoming a major spender. Back in February, the company projected its 2026 capital expenditures — covering data centers, chips, and network hardware — could spike to as much as $175 billion to $185 billion. That’s nearly double the roughly $91 billion anticipated in 2025.
The plan landed as Alphabet was delivering some of its best results in years. Revenue for the full year hit $403 billion. Search climbed 17% in the last quarter, while Cloud surged 48% to $17.7 billion—faster growth than Microsoft Azure. Chief Executive Sundar Pichai pointed to AI bets as the engine “drive revenue and growth across the board.” Alphabet Investor Relations
Still, shares have dropped over 15% since hitting their high in February, putting the stock on the brink of a bear market—a sharp retreat from those earlier gains. Traders have zeroed in on whether ongoing investments could crimp short-term cash flow, as higher energy bills, stricter lending, and antitrust fights all pile on.
Stocks struggled Thursday, weighed down by losses across the board. Tech stocks were especially hard hit—Meta slid 8.5% by afternoon, Microsoft off 1.2%—as U.S. indexes moved lower. A jury decision against Google and Meta in early cases related to harm to children injected another layer of legal uncertainty for big tech.
Alphabet tapped debt markets again last month, issuing a 100-year bond in a $31.51 billion global sale aimed at fueling its AI push. Meta and Microsoft are stepping up their AI spending too.
Wall Street doesn’t look unanimously cautious. Evercore ISI puts Google Search revenue growth at 14% or higher for 2026—that’s above the consensus 13%. Ivan Feinseth at Tigress Research says Google is “increasingly levered to multiple durable growth engines and AI-centric investment trends.” Morgan Stanley’s Brian Nowak, meanwhile, highlights faster-than-expected Waymo growth as a long-term positive. Investing.com
The risks aren’t hard to spot. According to Reuters Breakingviews, tech and infrastructure giants are on track to pour roughly $630 billion into AI this year, but factors like delays in power access, transformer supply, permits, and thin labor pools could slow things down and cut into profits. Alphabet CEO Pichai, for his part, expects the company to face “supply-constrained” conditions right up through 2026. Reuters
That puts Alphabet in a tight spot. Search, YouTube, and Cloud are all posting gains, yet Thursday’s drop shows investors are looking for firmer evidence that these operations can actually bankroll one of Silicon Valley’s heftiest AI wagers.
