Alphabet Plunges 6.9% After Lifting AI Capex to $205B; Tesla Tumbles 14% on Negative Cash Flow
GOOG sits 69% above its 52-week low of $188.7 on elevated volume (2.0× avg).
Summary
Alphabet shares suffered their largest one-day market cap loss on record, falling 6.9% after the company raised its 2026 capital spending forecast to as much as $205 billion — a sharp increase that reignited fears over AI investment returns. The move follows an $80 billion equity offering announced in June and a $700 billion capex plan unveiled in May, signaling an even more aggressive buildout. Tesla tumbled 14% after reporting its first negative free cash flow in two years, driven by heavy spending on autonomous vehicles and a chip facility with SpaceX and Intel. Both companies saw revenue soar but free cash flow turn negative, laying bare the cost of the AI arms race. The selloff was compounded by oil hitting $100 a barrel, adding macro pressure. With Alphabet's prior capex guidance already at $75 billion for Q1, the new $205 billion full-year figure represents a dramatic escalation that will weigh on margins and investor sentiment.
At the time of this announcement, GOOG was trading at $318.24 on NASDAQ in the Technology sector, with a market capitalization of approximately $3.9T. The 52-week trading range was $188.70 to $404.47. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Dow Jones Newswires.