Alphabet is confronting a paradox. Its cloud division is growing at breakneck speed, search traffic has hit an all-time high, and the Gemini AI platform now boasts over 900 million users. Yet the stock has tumbled ten percent in the past month alone, battered by a steady exodus of its most prominent artificial intelligence researchers to rivals OpenAI and Anthropic.
The latest departures came on June 24, when Jonas Adler and Alexander Pritzel — both key architects of the Gemini model — left for Anthropic. They follow Nobel laureate John Jumper, the architect of AlphaFold, who also joined Anthropic, and Noam Shazeer, a former co-lead of the Gemini project who moved to OpenAI. The pattern has unnerved investors. On Monday, Alphabet shares plunged five percent — their steepest single-day drop in over a year — closing near €301, roughly 14 percent below the all-time high of €351 set in mid-May.
The company is responding with a strategic reorganization of its internal AI coding unit. Previously focused on developer tools, the team will now train models for enterprise applications, aiming to better utilise Google Cloud’s infrastructure. That business is already on a tear: first-quarter cloud revenue surged 63 percent year-on-year, and the cloud backlog has swelled to roughly $460 billion. To capitalise on that pipeline, Alphabet plans capital expenditures of between $180 billion and $190 billion for 2026.
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But the ambitious spending spree may come at a cost. According to analysts, Alphabet is weighing an equity raise of up to $85 billion to help finance the cloud buildout, a factor they cite as a significant driver of the recent share weakness. The technical picture supports that view: the relative strength index stands at 37.7, dangerously close to the oversold threshold of 30. Shares are trading about five percent below their 50-day moving average of €318.23, though they remain roughly 12 percent above the 200-day line, suggesting the long-term uptrend is intact.
Product news offers a mixed bag. The launch of Gemini 3.5 Pro has been pushed back to July 2026 as Alphabet takes extra time for coding-efficiency tests. Gemini 3.5 Flash, however, is already available, bringing so-called “computer use” capabilities that let AI agents navigate screens and operate software autonomously. On the partnership front, Apple has chosen to integrate Google Gemini into Xcode 26.6 as an AI provider alongside OpenAI and Anthropic — a strategic win that keeps Alphabet’s technology embedded in the global developer ecosystem.
The next catalyst arrives on June 29, when Alphabet replaces Verizon in the Dow Jones Industrial Average. Index inclusion typically stabilises demand for a stock, but the market has so far greeted the news with indifference, distracted by the accelerating brain drain. DeepMind chief Demis Hassabis insists the company still runs the largest research department in the industry, yet each high-profile defection chips away at that claim. For now, Alphabet’s cloud boom and its talent crisis are pulling the equity in opposite directions, leaving investors to gauge which force will ultimately prevail.
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