NEW YORK, April 28, 2026, 10:36 EDT
Alphabet shares edged up 0.5% to $352.10 early Tuesday, sticking close to record highs. The stock swung between $345.94 and $352.68 as investors braced for Google parent’s latest earnings, while digesting new developments in AI, defense contracts, and ongoing regulatory scrutiny.
This shift is notable: Alphabet is set to report earnings Wednesday, right as Microsoft, Meta, and Amazon step up in the same session, putting the spotlight on four major U.S. tech names during a fraught phase of the AI investment cycle. According to Reuters, the group’s AI spending is barreling toward $600 billion this year, with investors zeroed in on whether gains from cloud and ad businesses will be enough to foot that hefty tab.
Alphabet will post its first-quarter results on April 29, ahead of a conference call scheduled for 1:30 p.m. Pacific, 4:30 p.m. Eastern. But revenue isn’t the only thing drawing focus—investors are watching to see if all that spending on chips, data centers, and Gemini, the company’s AI model lineup, translates into stronger earnings.
Melissa Otto at S&P Global Market Intelligence notes that Visible Alpha consensus now puts Alphabet’s first-quarter revenue at $106.9 billion. That’s up from the $101.5 billion estimate back in the fall, with sturdy ad performance and potential gains in Google Cloud factoring in. Otto adds: if Search and Ads remain steady, Cloud takes the spotlight again—analysts will be zeroing in on those margins.
That’s the key issue for Google stock right now. Advertising keeps bringing in the money, but it’s cloud revenue and rising AI expenses that are shaping how the market sizes up valuation. The figure investors keep zeroing in on: capital expenditure—spending on data centers, chips, and other long-term assets.
“What investors are looking for – us included – is what’s the return” on that spending, Joe Maginot, large-cap portfolio manager at Madison Investments, told Reuters. With companies now channeling more of their free cash flow into AI infrastructure, Maginot noted, the underlying economics are shifting. Reuters
Alphabet picked up a new AI headline ahead of its earnings. According to Reuters, Google has struck a deal with the U.S. Defense Department to provide its AI models for classified operations, referencing The Information. The report puts Google alongside OpenAI and Elon Musk’s xAI as suppliers of AI models for government classified use. Google, for its part, said it works with agencies on both classified and non-classified projects.
Regulatory pressure is building as well. On Monday, the European Commission issued preliminary findings to Google under the Digital Markets Act, detailing draft rules aimed at opening up crucial Android features—currently mostly limited to Google’s AI services on mobile devices—to outside players. The Commission set a May 13 deadline for feedback from interested parties.
EU antitrust chief Teresa Ribera argued the measures on the table would hand Android users “more choice” in AI services. Google isn’t on board. Senior competition counsel Clare Kelly hit back, telling Reuters the proposal would weaken “critical privacy and security protections” for users in Europe. Reuters
AI names wobbled. Stocks with ties to the sector slid after a Wall Street Journal piece flagged questions about OpenAI’s recent user and revenue numbers, Reuters said, putting pressure on Oracle, CoreWeave and Arm. “A move like this sends a ripple effect across the board,” said Todd Schoenberger, chief investment officer at CrossCheck Management, though he noted it’s not always obvious how the news will play out. Reuters
Alphabet’s risk is right out in the open. Even a solid cloud result might fall flat if management talks up more AI investment but still can’t show returns, or if European regulators end up forcing tweaks that hit Android’s edge as a Gemini delivery route. If ads go soft, swallowing those costs gets tougher.
Investors still see Alphabet as a solid AI play, not a flop—at least for now. That stance faces a quick reality check with Wednesday’s report.
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