Google pulls back near $337 as AI capex concerns grow

Google pulls back near $337 as AI capex concerns grow
Google

​Alphabet Class A shares are under pressure after falling from the May peak above $400 to the $337 area shown on the daily chart. Premarket trading near $341 suggests a small rebound attempt, but the stock remains below short-term moving averages, so sentiment is still cautious despite today’s Dow Jones Industrial Average inclusion.

AI and cloud fundamentals

Latest reported Q1 2026 results were strong: Alphabet revenue rose 22% year over year to about $109.9 billion, while EPS came in at $5.11. Google Cloud was the main growth driver, with revenue up 63% to $20 billion, supported by demand for AI infrastructure, Gemini-based enterprise tools and TPU capacity.

News drivers

The recent selloff is linked less to weak growth and more to investor concerns over AI spending. Alphabet’s 2026 capex guidance is now seen around $180-$190 billion, raising questions about free cash flow and timing of returns. Sentiment was also hit by reports of high-profile AI talent departures to OpenAI and Anthropic, while regulatory pressure around Google Search, AI content use and ad-tech remains a long-term risk.

Technical picture

On the chart, GOOGL is testing the $335-$340 zone after breaking below the $360 area. If buyers defend current levels, the first rebound targets are $350 and $360-$365. A stronger recovery would require a close above $370. If the stock loses $330, pressure may extend toward $315-$320, where longer-term support is visible.

Conclusion

Baseline outlook is neutral to cautiously positive, but confirmation is missing. Alphabet still has strong Search, Cloud and AI fundamentals, and Dow inclusion adds symbolic support. However, heavy capex, AI competition and regulatory risks, as stated in Google holds key support while AI investment doubts limit recovery, limit upside until GOOGL reclaims the $360-$370 area.

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