Alphabet declines as traders take profits on long positions

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Anton Kharitonov

25.05.2026

Alphabet declines as traders take profits on long positions — GOOGL

Alphabet remains one of the main beneficiaries of the new AI boom cycle. Following a series of major announcements in May and a strong quarterly earnings report, investors increasingly view Google not merely as an advertising company, but as a full-scale AI infrastructure leader.

The key growth driver remains rapid expansion of Google Cloud and deep integration of Gemini across the company’s core ecosystem, including Search, Android, Workspace, and YouTube.

At Google I/O 2026, the company effectively unveiled a new strategy centered on “agentic AI,” with Gemini evolving into a universal AI layer across Google services. Among the most important announcements were Gemini Spark, new multimodal models, next-generation AI search capabilities, and Android XR devices. Markets interpreted this as a sign that Google is focusing not on a standalone chatbot, but on embedding AI into billions of consumer and enterprise products.

Google Cloud emerges as primary financial growth engine

Alphabet’s latest quarterly results came in significantly above expectations. Revenue reached $109.9 billion (+22% YoY), while Google Cloud surged 63%, marking one of the strongest performances among major hyperscale providers. Operating margins in the Cloud segment improved sharply, indicating that AI investments are beginning to generate meaningful profitability rather than simply increasing costs.

An additional catalyst came from the joint Google–Blackstone initiative to develop an AI cloud company powered by Google TPU chips. Blackstone is expected to invest roughly $5 billion, and the project is widely seen as an effort by Alphabet to reduce Nvidia’s dominance while strengthening its own AI infrastructure position.

Key risks: massive spending and antitrust pressure

Despite the positive market sentiment, Alphabet still faces substantial risks. The company continues to increase capital expenditures aggressively, with projected AI infrastructure investments approaching $190 billion. This puts pressure on free cash flow and raises concerns about how quickly AI monetization can offset rising costs.

At the same time, regulatory pressure continues to intensify. Antitrust proceedings in the United States remain focused on Search and digital advertising dominance, while investors are closely monitoring whether Google can maintain leadership against OpenAI, Microsoft, and Meta in consumer AI. Nevertheless, analyst consensus remains broadly constructive: Alphabet’s combination of search dominance, cloud scale, proprietary TPU chips, and massive user ecosystem continues to position the company as one of the strongest AI investment themes of 2026.

Thus, after reaching the $408 level, GOOGL shares came under pressure as traders began locking in profits on long positions. However, downside remains limited for now by support near the $385 area. From current levels, attempts to rebound toward $390–400 remain possible; a breakdown below support, as previously noted in Alphabet accelerates AI transformation, could intensify bearish pressure.

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