NEW YORK, May 19, 2026, 16:37 (EDT)
- Alphabet Class A stock traded at $387.66 soon after the U.S. market closed, off $9.19, or 2.3%.
- Google used I/O to pitch lower-cost Gemini models, bring AI agents into Search and roll out new paid AI subscription options.
- Alphabet is getting a new way into AI infrastructure with a $5 billion TPU cloud project backed by Blackstone. But expectations are high.
Alphabet shares edged lower Tuesday. Investors looked past Google I/O launches and a fresh Blackstone-backed AI cloud announcement, with the stock seen as already reflecting big gains in Google’s AI position.
Alphabet Class A stock last traded at $387.66 at 4:21 p.m. EDT, off $9.19 from its previous close, after hitting an intraday high of $401.71. The company’s market cap was around $4.70 trillion.
Timing is key. Alphabet, once viewed as behind in AI by Wall Street, is now seen as a core AI infrastructure play, driven by strong Google Cloud numbers and its in-house AI chips. For the April quarter, Alphabet posted a 22% rise in revenue to $109.9 billion. Google Cloud revenue soared 63% to $20.0 billion.
Google on Tuesday pushed to keep users on Search, get developers to use Gemini, and convince business customers its AI is cheaper to run. At I/O, the company brought AI agents to Search and introduced Gemini 3.5 Flash, a version built for faster, cheaper coding and automation tasks. “When people use our AI-powered features in search, they use search more,” CEO Sundar Pichai said. Reuters
Google lowered the price of its top AI Ultra plan to $200 a month, down from $250, and rolled out a $100-a-month option targeting developers and heavy users. Gemini Spark, a 24-hour agent meant to work across Google products, is set for trusted testers this week and will be available to U.S. AI Ultra beta users next week, the company said.
Gemini 3.5 Pro isn’t live yet. Google said it has released 3.5 Flash for the Gemini app, AI Mode in Search, along with developer and enterprise tools, but said 3.5 Pro is still internal and should arrive next month.
Some I/O attendees reacted with groans after Sundar Pichai told them, “Give us until next month,” according to Business Insider, following hopes that the Pro model would launch at the conference. That left a small gap in the day’s message. Business Insider
Blackstone on Monday said it plans to put up $5 billion in equity for a new U.S. venture with Google. The partnership aims to provide data center space and access to Google’s TPUs as a “compute-as-a-service” product, letting customers rent AI compute power instead of buying hardware. The first 500 megawatts of capacity is targeted for 2027. Blackstone
Google’s TPUs are custom chips for AI training and inference. Blackstone President Jon Gray said the expansion is a “generational opportunity.” Google Cloud CEO Thomas Kurian said the joint venture “helps meet growing demand for TPUs.” Blackstone
Alphabet is stepping up pressure on Nvidia in AI computing and is taking aim at OpenAI and Anthropic for enterprise AI jobs. Reuters quoted AI and supply-chain consultant Brittain Ladd, who called the move “a high-quality bet on sustainable growth in AI infrastructure.” Reuters
But the risk story is familiar here. Bank of America analyst Justin Post said before I/O that the bar was high and “AI surprises” were needed for more multiple expansion. Analysts also cited risks like search traffic moving to rival AI services, lagging large language model rollout in Search, regulatory overhang in the EU, and higher capex, with more money going into chips and data centers. TheStreet
Alphabet is telling investors the search business will hold up against AI, while also pitching Google’s own chips, cloud and reach as the base for bigger AI sales. Shares on Tuesday showed the market wants more evidence, not just new features.
