Alphabet is facing a rare stretch of pressure just as it prepares to raise $85 billion to support its artificial intelligence expansion. The stock is on track for a fourth straight weekly decline, its longest losing streak in more than a year, after briefly surpassing Nvidia by market value only a month ago.
The shift in sentiment comes even though Alphabet remains one of Wall Street’s strongest megacap technology names. Investors are now weighing whether the company’s huge spending plans, growing capital needs, and slower recent stock performance can coexist with its ambitions in AI.
Rising capital needs meet weaker trading
Alphabet has already increased its capital spending outlook to as much as $190 billion for the year, up from $185 billion. The company is pouring money into data centers, chips, and systems designed to handle fast-growing AI demand.
Before the latest equity plan, Google had already secured more than $55 billion in fresh debt since November. Melius Research expects Google’s free cash flow to turn negative for the next few years as AI investment accelerates.
That backdrop has made the decision to pursue more financing stand out. Dan Niles, founder of Niles Investment Management, said he never expected Google to go to public markets to fund spending, even though he described Alphabet as having “the best stack in all of AI.”
Why Alphabet wants the money now
Alphabet is presenting the raise as a way to protect financial flexibility while it speeds up infrastructure spending. Executives have argued that access to debt and equity markets is becoming a strategic advantage as AI demand expands.
Sundar Pichai said in an investor presentation that demand from enterprises and consumers is “meaningfully exceeding” available supply. He called that a “clear indicator” of Alphabet’s opportunity and said supporting users, enterprises, and developers at scale requires massive compute investment.
Pichai also said capex is set to rise significantly again in 2027, with most of the spending going to technical infrastructure. CFO Anat Ashkenazi described the equity offering as “a strategic proactive move to optimize our financial flexibility and maximize long-term shareholder value creation.”
Cloud growth and AI usage are part of the pitch
Alphabet is also trying to show that the spending is producing results. Google Cloud revenue rose 63% from a year earlier in the first quarter to a record $20 billion, while backlog nearly doubled sequentially to more than $460 billion.
Ashkenazi said AI solutions are now the largest driver of cloud growth for the first time, and 75% of cloud customers are using Alphabet’s AI products. The company also said it has reduced Gemini serving costs by 78% since 2025, while hardware and engineering improvements have lowered the cost of core AI responses by more than 30% since the launch of Gemini 3.
Alphabet’s consumer AI tools are also gaining traction. Pichai said AI Overviews now has more than 2.5 billion monthly users, while AI Mode has passed 1 billion monthly users a year after launch.
Investor doubts have started to surface
The stock’s latest decline has followed an underwhelming Google I/O presentation last month and concerns that Alphabet has fallen too far behind in AI coding models. That has added a layer of caution to a company that had climbed more than 120% over the past year before the recent pullback.
The timing also matters because the broader AI financing race is intensifying. SpaceX is heading toward the Nasdaq next week with a planned record $75 billion initial share sale, while Anthropic has confidentially filed for an IPO and OpenAI is expected to do so soon.
What the market is watching next
Alphabet’s move may also test how far investors are willing to support massive AI funding plans across the tech sector. Goldman Sachs CEO David Solomon, whose firm is involved in the transaction, called the equity offering “the first actual concrete data point” for these large AI share sales.
He said capital is still available, but sentiment can shift quickly when unprecedented amounts of money are being raised. HSBC analysts also warned that more capital raises are likely across hyperscalers as companies race to keep up with demand and avoid falling behind rivals.
For now, Alphabet is trying to balance two messages at once: that its AI strategy is already driving cloud growth and user adoption, and that its expanding build-out requires even more capital to keep pace with demand.
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