New York, April 20, 2026, 2:39 PM EDT
Alphabet stock edged down Monday, despite news that Google is negotiating with Marvell Technology on two new artificial intelligence chips—a signal that new AI initiatives aren’t quelling investor unease over spending. Class A shares slipped 0.9% to $338.45 by the afternoon, putting Alphabet’s market cap around $2.94 trillion.
Timing is in focus. Alphabet is set to report first-quarter earnings on April 29, with its stock wedged between resilient cloud and search demand—and a looming $175 billion to $185 billion spending proposal for 2026. The market’s staring down a key question: can that investment deliver quickly enough to satisfy shareholders? Bulls highlight operational strength; critics aren’t convinced, arguing the AI investment could get ahead of near-term payoff.
Marvell climbed 6.1% after the announcement, while Broadcom slipped 2.4%. The moves suggest investors think Google might be looking to diversify its chip suppliers, despite continuing to invest heavily in its own silicon projects. According to Reuters, the potential partnership could cover development of a memory processing unit to complement Google’s in-house AI chips—its tensor processing units, or TPUs—as well as a fresh TPU focused specifically on inference, the phase where trained AI models deliver responses.
Google has an existing partnership with Broadcom for TPU design, and on April 6, Broadcom announced a long-term deal to work on and provide Google’s future custom AI chips through 2031. Reuters reached out to Google and Marvell for comment, but neither company replied right away.
The talks come as more tech giants look to move away from dependence on Nvidia’s expensive GPUs, opting instead to develop their own specialized chips. Just last week, Meta renewed its Broadcom deal through 2029 for multiple generations of AI processors—a sign that what started as trial projects are now rapidly becoming critical infrastructure.
Alphabet’s numbers are moving. CEO Sundar Pichai, back in February, pointed out that annual revenue cleared $400 billion for the first time. Search climbed 17% in the December quarter, while Cloud shot up 48%. The Gemini app? Over 750 million monthly active users. “We’re seeing our AI investments and infrastructure drive revenue and growth across the board,” Pichai told analysts. Alphabet Investor Relations
Back in February, Reuters flagged Google Cloud as the top growth driver among the big three U.S. cloud players for the December quarter, crediting a surge in Gemini-related demand. With April 29 around the corner, investors are eyeing whether Google can keep up that momentum—and if cloud backlog and ad spending remain solid enough to offset higher costs.
Russ Mould, investment director at AJ Bell, sees logic in customers looking to “diversify their sources of supply” to mitigate both technology and supply-chain risk. That stance has only gotten a boost after TSMC and ASML last week reported that AI demand shows no sign of cooling, with available production capacity for cutting-edge chips still stretched. Reuters
The picture can shift fast. Bernstein’s Mark Shmulik is calling for mega-cap AI spending to top “north of a trillion dollars” by 2026. Morgan Stanley analysts caution that investors want clear justification for heavy spending—and patience runs thin if returns aren’t obvious. TSMC boss C.C. Wei added that “capacity is very tight,” flagging that even major players are still up against supply constraints. Reuters
Advertising is also turning into a battleground. Last week, Emarketer forecast that Meta could overtake Google in global digital ad revenue by 2026. That puts even more pressure on Alphabet to shore up its core ad business with AI and ramp up cloud growth ahead of earnings.
