Alphabet slips toward $352 as AI spending and technical pressure weigh on shares
Alphabet (GOOGL) shares are trading around $352 on Tuesday, down roughly 1.5% during the session. The fundamental picture nevertheless remains strong following the company’s second-quarter 2026 results.
Revenue rose 24% year on year to $119.8 billion, operating income increased 30% to $40.8 billion, and the operating margin expanded to 34%. Google Services generated $94.5 billion in revenue, with Search & other up 17% and YouTube Ads rising 13%.
Google Cloud was again the key growth driver, with revenue surging 82% to $24.8 billion and operating income exceeding $8.8 billion. The results confirm that demand for cloud infrastructure and enterprise AI solutions remains a major pillar of Alphabet’s growth outlook.
AI investment remains key investor focus
As with other hyperscalers, the main question for investors is the scale of AI-related spending. Alphabet raised its 2026 capital expenditure forecast to $195-$205 billion from $180-$190 billion, citing accelerated investment in computing capacity to meet demand. The company also expects CapEx to increase substantially again in 2027.
At the same time, Google Cloud backlog rose by more than $50 billion during the quarter to $514 billion, with more than half of that amount expected to be recognized as revenue over the next 24 months. This helps ease concerns that AI spending is purely speculative, although higher depreciation, data-center costs and reliance on third-party capacity could put some pressure on margins in the coming quarters.
$352 support comes under pressure
After recovering toward resistance near $385, GOOGL has come under renewed pressure, with bears currently testing support around $352. The failure to establish a foothold above the $360-$365 area points to increased downside risks and a potential decline toward $345-$340, although buying interest could strengthen at those levels.
A break above $365, as I noted in Alphabet slides as AI leadership shake-up revives execution concerns, would improve the near-term technical picture and open the way toward the $370-$380 area.
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