Alphabet Shares Slide as AI Spending Hits $185 Billion

Key Update

Alphabet Inc. (GOOGL) shares tumbled 3% this morning after CFO Ruth Porat confirmed the company plans to spend approximately $185 billion on capital expenditures in 2026—nearly double its 2025 budget.

Details

* Where is the money going? Almost exclusively into custom TPUs (Tensor Processing Units) and new gigawatt-scale data centers to support Gemini 2.5 training.
* Market Reaction: The Nasdaq Composite slid 1.5% as the "AI Rotation" accelerated. Investors are shifting funds from hyperscalers to energy and utilities, fearing that ROI on AI infrastructure will take longer than expected.

Background

The "AI Arms Race" has forced Big Tech to burn cash at unprecedented rates. While Google remains profitable, the sheer scale of this investment—exceeding the GDP of many small nations—has ignited fears of margin compression.

Why It Matters

This signals a shift in market sentiment. For two years, "AI at any cost" was the mantra. Now, Wall Street is demanding efficiency. Google's gamble is that whoever owns the compute owns the future, regardless of the short-term stock price pain.