New York — February 8, 2026, 06:50 EST. The market is closed.
- Alphabet slipped 2.5% by Friday’s close, lagging behind as tech stocks bounced back elsewhere.
- Big Tech valuations are getting a fresh look as firms commit to significantly larger AI infrastructure budgets.
- This week’s upcoming U.S. jobs and inflation numbers may jolt rate expectations and shake up valuations for high-growth names.
Shares of Alphabet Inc closed out Friday at $322.86, slipping 2.5% as doubts persisted over how much the Google parent is spending on its artificial-intelligence ambitions. 1
Wall Street closed in the green, chip names out front, and the Dow topped 50,000 for a first-ever close. The drop was notable. 2
Forget about the last quarter—focus has shifted to the next set of bills. Big Tech’s opening the spigot on capital spending, which has investors pressing for answers: when does all this show up in real cash flow, not just flashy demos? 3
Alphabet found itself in the thick of that transition. Reuters noted the company’s spending might nearly double this year—a detail that triggered a steep selloff earlier in the week. By Friday’s close, the stock was still lagging. 4
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said that even with solid fundamentals in cloud, investors are still hung up on what he called “ballooning” investment plans. 4
“Capex” is trader-speak for capital expenditures, the outlay for data centres, servers, and chips. A spike in that line item? It can dwarf even rapid revenue gains, and suddenly those forecasts don’t leave much room for error.
The AI rally is starting to fracture. Investors have shifted some cash into “picks and shovels” plays—hardware stocks fueling data centers. Software companies and the big platforms, on the other hand, are facing scrutiny over returns on fresh spending. 5
“Spending for spending’s sake” just isn’t cutting it anymore, according to Mark Hawtin, head of global equities at Liontrust. Investors want to see a direct link between where the money goes and what comes back in profit. 5
Alphabet’s options are tightening. Pouring money into search and cloud might sharpen its lead, but that’s a gamble—if demand weakens, costs don’t budge, or competitors push prices lower, the risk jumps. Analysts at MoffettNathanson put it bluntly: the “margin of error is shrinking” for hyperscalers. 3
U.S. markets are closed this weekend, so attention shifts to next week’s macro data. The Labor Department plans to release January’s postponed jobs report on Wednesday. Then, Friday brings the January CPI numbers, set for 8:30 a.m. ET. 6
