Alphabet Inc. has seen its stock price more than double over the past 12 months, adding over $2 trillion in market capitalization to reach $4.3 trillion and become the world’s second-most valuable company, but the shares are now struggling amid a market rotation away from big AI spenders. The stock lost 6% in June and has been in the red for four of the last five months, with drops of more than 7% in February and March, though a 34% surge in April leaves it up 14% for the year, trailing the Nasdaq 100’s 20% gain. Alphabet announced plans to raise about $85 billion from equity sales to fund capital expenditures, which weighed on the stock, and it has seen a series of high-profile AI researcher departures. The company plans to spend as much as $190 billion on capex this year, and Bloomberg Intelligence analyst Mandeep Singh wrote that the equity raise points to a further increase in 2027 capex that could climb around 50% to $300 billion, eating into free cash flow expected to fall to $20.5 billion in 2026 and $14 billion in 2027 from more than $73 billion in 2025. Despite the near-term pressure, Morgan Stanley analyst Brian Nowak lifted his price target to $415 from $375, calling it a tactical buying opportunity, and Matrix Asset Advisors’ David Katz said he is comfortable that Google will be a winner and is spending responsibly.
Alphabet Inc Class CAlphabet plans to raise $85 billion from equity sales to fund capex, weighing on stock and signaling further capex increase to $300 billion by 2027, eating into free cash flow.
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