- Alphabet (GOOGL) stock fell 2.5% Thursday, extending a five-day slide to 4% despite a strong quarterly earnings beat.
- Investor concerns focus on the company’s guidance for capital expenditures of $175 billion to $185 billion for 2026, nearly double its 2025 spending.
- Analyst sentiment remains mixed, with price targets ranging from Rosenblatt‘s $279 Neutral to others above $350, citing the payoff from its Gemini AI platform’s 750 million users.
Alphabet (GOOGL) shares continued their decline on Thursday morning following the release of its quarterly earnings the prior day, slipping 2.5% as broader anxieties around AI investment spending weighed on the tech sector. The stock is now down 4% over the past five days, trading around $324, a notable retreat despite a fundamentally solid financial report.
The company reported impressive earnings of $2.82 per share on revenue of $113.83 billion, surpassing analyst expectations across key metrics. However, the initial post-earnings recovery was short-lived, as Thursday’s trading session failed to sustain any positive momentum.
Consequently, the primary catalyst for the sell-off appears to be the disclosed capital expenditure guidance. Alphabet projected spending of $175 billion to $185 billion for 2026, which represents nearly double its planned 2025 outlays.
This trend of heavy AI-focused spending has triggered similar reactions across major tech stocks, causing NVDA, AMD and now GOOGL to slip according to recent earnings reports. Meanwhile, the company’s Gemini AI platform reached a significant milestone of 750 million monthly active users, validating its strategic direction.
CFO Anat Ashkenazi addressed the spending plans directly during the earnings call, aiming to reassure investors about the company’s financial stability. Analysts, therefore, maintain a generally positive outlook, citing strong potential for AI and cloud revenue growth.
Price targets from firms like Wedbush and Guggenheim suggest potential upside to $350 and $375 respectively. In contrast, Rosenblatt and DA Davidson hold more conservative Neutral ratings with targets of $279 and $300.
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