After its quarterly earnings were unveiled on Wednesday, Alphabet (GOOGL) stock continues to slip, falling 2.5% on Thursday morning. In the last five days, shares have been down 4%, trading at $324. Despite a solid earnings report, the stock is still down, as AI bubble concerns continue to mount.
The tech giant’s performance catalyzed significant investor interest, reporting earnings of $2.82 per share on revenue of $113.83 billion and surpassing analyst estimates across various major financial metrics. While the dip was slightly recovered after hours, Thursday morning hasn’t bode well for Alphabet (GOOGL) stock.
Alphabet stock initially wavered after the company disclosed capital expenditure guidance of $175 billion to $185 billion for 2026, which represents nearly double its 2025 spending. The worries of overspending on AI have been felt throughout tech stock earnings/forecasted expenditures, causing NVDA, AMD and now GOOGL to slip.
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On the other hand, the Gemini AI platform reached 750 million monthly active users, which validates the company’s AI strategy and demonstrates that Alphabet’s investments in AI technology are paying off. This user growth has accelerated adoption across multiple essential technology segments, and the platform continues expanding its reach through various major market initiatives. CFO Anat Ashkenazi explained the spending plans during the earnings call and also reassured investors about the company’s financial position.
Despite the drop in Alphabet’s stock, analysts remain positive, citing strong potential for AI and cloud revenue growth, with price targets between $370 to $400. Wedbush and Guggenheim suggest potential upside with price targets of $350 and $375 respectively. Rosenblatt and DA Davidson are more conservative with Neutral ratings and targets at $279 and $300.