Alphabet Inc. faces significant market pressure, overshadowing blockbuster news from its self-driving subsidiary, Waymo. While the autonomous vehicle unit is in talks for a funding round that could more than double its valuation to approximately $100 billion, investor sentiment is being weighed down by broader uncertainties. The company’s Class A shares fell 3.2% to $296.72 in the latest session, reflecting concerns over the cost of artificial intelligence infrastructure.
Infrastructure Concerns Overshadow Operational Strength
The immediate pressure on Alphabet’s stock appears linked to reports questioning funding commitments for a planned $10 billion data center project in Michigan. This uncertainty around massive AI-related capital expenditures is causing investor hesitation, particularly in a market environment where technology stocks are vulnerable to profit-taking. This negative sentiment persisted despite Alphabet’s solid fundamental performance. The company’s third-quarter earnings per share of $2.87 significantly surpassed estimates of $2.29, revenue grew 16% to $102.35 billion, and it maintained a robust net margin of 32.23%.
The share price decline on Tuesday was pronounced. Alphabet’s equity dropped $9.85, or 3.21%, underperforming the broader indices; the S&P 500 retreated 1.16%, while the Nasdaq Composite fell 1.81%. Trading volume spiked roughly 15% to 27.36 million shares, indicating substantial institutional selling. This pullback has moved the stock notably away from its 52-week high of $328.83, reached just in November.
Waymo Negotiates Landmark Funding Round
In a striking operational development, Waymo is negotiating a capital raise exceeding $15 billion. This investment would value the robotaxi division at close to $100 billion, with internal discussions even mentioning figures around $110 billion. This represents a dramatic increase from its valuation of approximately $45 billion during its previous funding round in October 2024.
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Alphabet is expected to lead this new funding initiative. The capital is intended to fuel the global expansion of Waymo’s driverless fleet, facilitate entry into additional U.S. cities, and prepare for a launch in London. The unit’s operational metrics are strong, with “rider-only miles”—trips without a safety driver—jumping 24% in Q3 2025 compared to the prior quarter.
Insider Sale and Analyst Outlook
Adding to the cautious mood was a notable insider transaction. Chief Accounting Officer Amie Thuener O’Toole sold 2,778 shares on December 15 at an average price of $312.30, generating proceeds of about $867,569. This transaction reduced her direct holdings by approximately 23%.
Despite the short-term weakness, analyst consensus remains broadly optimistic. Citizens Bank recently reaffirmed its “Market Outperform” rating with a $340 price target. Most market experts view the current level near $297 as a consolidation phase within a longer-term upward trend. The average analyst price target stands at $313, implying a potential upside of just over 5%.
The divergence between Waymo’s operational progress and Alphabet’s near-term share price performance is likely to resolve in the coming weeks. Key factors will be whether Alphabet provides clarity on its infrastructure financing plans and if Waymo successfully secures its targeted $100 billion valuation. Until then, elevated volatility for the stock is expected to continue.
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