Shares of Alphabet have been caught in a tug-of-war between two starkly different signals. On one side, Berkshire Hathaway has placed a $10 billion wager on the tech giant, splitting its purchase evenly between A and C shares — an unusually large commitment for a company that typically steers clear of capital-intensive tech bets. On the other, a string of high-profile departures from Google’s AI labs triggered a brutal selloff that erased up to $269 billion in market value on Monday alone.
The personnel losses cut deep. Noam Shazeer, who had been co-leading development of the Gemini model family, is moving to rival OpenAI. Alphabet only recently lured him back in 2024 through a $2.7 billion deal involving his startup Character.AI. Equally unsettling, John Jumper — a Nobel laureate from 2024 — is leaving Google DeepMind for Anthropic. D.A. Davidson analysts describe the departures as a clear warning that Alphabet risks falling behind in the race to build next-generation AI tools.
The exodus comes at a moment when Alphabet is committing staggering sums to maintain its technological lead. Since October, the company has raised roughly $141 billion in fresh capital. Most recently, it tapped equity markets for nearly $85 billion to fund an aggressive expansion. Management plans to spend up to $190 billion on AI infrastructure alone by 2026 — six times its previous budget. The money is earmarked for new data centers, proprietary AI chips, and scaling the next generation of Gemini models.
These investment plans, however, are squeezing the company’s finances. Free cash flow in the first quarter slumped by nearly half, landing at just $10.1 billion. A further $40 billion share sale program is set to launch in the third quarter to cover ongoing capital needs. Jefferies analysts nevertheless reaffirmed their “Buy” rating on Tuesday, brushing aside near-term profitability concerns.
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Operational hiccups have added to the narrative of a company under strain. Waymo, Alphabet’s self-driving unit, was forced to recall roughly 3,900 vehicles for software defects after one of its robotaxis drove into oncoming traffic in Inglewood, California. Separately, outages at Gmail and YouTube on Monday compounded investor unease.
The market’s immediate reaction has been deeply negative. On Monday, Alphabet’s stock closed at roughly $349, down more than 5%. The decline extended into Tuesday, with shares falling another 2% in European trading to €299.85. That leaves the stock down about 11% over the past month. Technical indicators are flashing warning lights: the price has slipped decisively below its 50-day moving average, and the relative strength index has dropped to 36.7, a level many technicians consider oversold.
Alphabet will publish second-quarter results at the end of July. That report will provide the first concrete numbers on how the company’s radical new strategy — massive spending paired with a capital structure overhaul — is affecting operating margins. Investors will also be watching for any update on how the company intends to plug its talent gaps while executing the most expensive AI buildout in corporate history.
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