Google Breaks 20-Year Funding Habit with $80 Billion Equity Raise as AI Spending Soars
Alphabet (GOOGL) experienced a sharp 9% stock decline in mid-July 2026 following reports that its Gemini 3.5 Pro AI model is delayed, just days before its Q2 earnings report. The sell-off highlights investor anxiety over Alphabet's unprecedented $190 billion AI capital expenditure plan for 2026, which has forced the company to break a roughly 20-year habit by launching an $80 billion equity raise—its first major stock sale in two decades. Warren Buffett's Berkshire Hathaway contributed $10 billion. The article analyzes whether AI revenue, particularly from Google Cloud (which grew 63% to $20 billion), can outpace depreciation costs from massive infrastructure spending. Alphabet's custom TPU chips offer potential cost advantages over Nvidia, though adoption outside Google remains uncertain. Despite the drop, analysts maintain a Strong Buy consensus with an average price target of $438.
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Google Breaks 20-Year Funding Habit with $80 Billion Equity Raise as AI Spending Soars
Alphabet (GOOGL) experienced a sharp 9% stock decline in mid-July 2026 following reports that its Gemini 3.5 Pro AI model is delayed, just days before its Q2 earnings report. The sell-off highlights investor anxiety over Alphabet's unprecedented $190 billion AI capital expenditure plan for 2026, which has forced the company to break a roughly 20-year habit by launching an $80 billion equity raise—its first major stock sale in two decades. Warren Buffett's Berkshire Hathaway contributed $10 billion. The article analyzes whether AI revenue, particularly from Google Cloud (which grew 63% to $20 billion), can outpace depreciation costs from massive infrastructure spending. Alphabet's custom TPU chips offer potential cost advantages over Nvidia, though adoption outside Google remains uncertain. Despite the drop, analysts maintain a Strong Buy consensus with an average price target of $438.