New York, May 25, 2026, 10:01 (EDT)
Alphabet Inc. shares sat out Monday with the Nasdaq closed for Memorial Day. Investors looked over a tough week for Google’s parent. Nasdaq’s 2026 calendar shows May 25 as a day off, with the usual trading hours from 9:30 a.m. to 4 p.m. Eastern.
Alphabet slipped while the rest of the market moved up. Its Class A shares finished Friday at $382.97, off 1.21% on the session and down 3.5% for the week. The Nasdaq Composite added around 0.5% this week, with the S&P 500 up roughly 0.9%.
Alphabet’s gap is front and center Tuesday. Investors saw the tech giant as a clear AI play, but last week’s drop showed they’re still ready to cut the stock when AI costs come up again.
Google and Blackstone last week said they’ll launch an AI cloud business together. Blackstone is committing $5 billion up front, targeting 500 megawatts of data-center capacity by 2027. Users of the new venture will get access to Google’s Tensor Processing Units, the company’s in-house AI chips. “A high-quality bet on sustainable growth,” said Brittain Ladd, an AI and supply-chain consultant at Chang Robotics. Reuters
Google kept up its AI push at Google I/O, dropping AI agents into Search and launching a faster, cheaper Gemini model. CEO Sundar Pichai said people who use AI search “use Search more.” Search exec Nick Fox called it the “biggest reinvention of the search box in 25 years.” Reuters
Google is leaning on TPUs as its answer to Nvidia’s GPUs, the top chips for AI work, but Google Cloud still trails AWS and Azure. Thomas Monteiro, senior analyst at Investing.com, said Alphabet’s $180 billion capex plan was “within the company’s spending power” after its latest results. Capex, or capital expenditure, covers long-term assets like data centers, chips and equipment. Reuters
Alphabet’s latest report gives bulls room for now. In its April 29 filing, the company posted first-quarter revenue up 22% at $109.9 billion, with Google Cloud revenue up 63% to $20.0 billion. Operating income increased 30%. Free cash flow hit $10.1 billion after $35.7 billion spent on property and equipment.
Legal risks are in play, too. Google on Friday appealed a Washington federal judge’s decision finding it held illegal monopolies in search and search ads. The Justice Department will file arguments in July. If Google wins on appeal, it could avoid an order to share some search data with rivals.
Legal risks aren’t the only concern. The PCE price index is out May 28, and a strong number could drive bond yields up, weighing on pricey growth stocks. If that hits when investors are already second-guessing AI spending, Alphabet may stay under pressure, even without fresh negative news for the company.
Alphabet heads into Tuesday’s open facing a key test. After last week’s slide, it’s not clear if buyers see that dip as just a break in a strong run or a hint the AI trade is running out of steam and needs more evidence. Alphabet has revenue momentum, but the market wants to know what it will cost to keep it going.
