Stock Track | Alphabet Plummets 7.81% Intraday as Aggressive AI Spending Plans Spark Profit Concerns

Stock Track02-05 22:49

Alphabet Inc. (GOOGL) shares plummeted 7.81% during Thursday's intraday trading session, extending pre-market losses following the company's announcement of a massive increase in capital expenditure plans for artificial intelligence infrastructure.

The Google parent reported solid fourth-quarter results that beat analyst expectations, but simultaneously unveiled a 2026 capital expenditure forecast of $175 billion to $185 billion, nearly double prior market estimates. This aggressive spending ramp-up fueled investor concerns about near-term profit margins and free cash flow compression, as the company intensifies its investments to stay competitive in the AI race.

Market analysts noted that while Alphabet's cloud business showed strong growth with revenue up 48% year-over-year, the scale of the planned AI investment has raised questions about the sustainability of capital returns. The reaction reflects broader market unease about how quickly Big Tech can turn massive AI investments into tangible financial payoffs.

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