Google Stock Heads Under $300 on Alphabet’s Spending and Michael Burry Warning
Despite record revenue and profit, Alphabet’s aggressive spending plans and rising macro risks are prompting investors to reassess whether..
Quick overview
- Alphabet's stock has retreated from a record high of $349 to around $300, prompting investor concerns about growth momentum amid rising macro risks.
- Despite impressive fourth-quarter earnings and a record annual revenue of $403 billion, investor focus has shifted to Alphabet's aggressive spending plans, particularly in AI infrastructure.
- The company's recent issuance of a 100-year bond has sparked debate about its long-term strategic positioning and raised concerns about capital intensity in the AI sector.
- While Alphabet's fundamentals remain strong, investor confidence is increasingly tied to capital efficiency and disciplined execution in the face of macroeconomic challenges.
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Despite record revenue and profit, Alphabet’s aggressive spending plans and rising macro risks are prompting investors to reassess whether growth momentum can justify escalating capital commitments.
Record Highs Give Way to Reassessment
Alphabet shares have reversed sharply after reaching a fresh all-time high of $349 last week. The stock has since retreated toward the $300 area, including a 2.3% daily decline and additional after-hours weakness, raising concerns about a potential near-term trend shift.
The pullback comes amid broader market weakness, fueled by renewed tariff rhetoric and heightened geopolitical tensions. While Alphabet’s longer-term uptrend remains intact, the speed of its recent rally left little room for disappointment. As a result, even strong earnings were not enough to prevent profit-taking once macro uncertainty resurfaced.
The company briefly reached a $4 trillion market capitalization during the rally, underscoring the magnitude of the advance—and the sensitivity to shifts in sentiment.
Earnings Overshadowed by Spending Surge
Operationally, Alphabet delivered impressive results. Fourth-quarter revenue rose 18% year over year to nearly $114 billion, surpassing analyst expectations. Net income increased 30% to $34.5 billion.
For the full year 2025, Alphabet reported a record $403 billion in sales—the first time annual revenue exceeded $400 billion. Profit reached approximately $132 billion, reflecting strong momentum across digital advertising and cloud computing.
However, markets focused less on the earnings beat and more on forward spending plans. Alphabet announced that capital expenditures are expected to rise dramatically to between $175 billion and $185 billion this year, nearly double the $91–$93 billion spent in 2025.
That acceleration in investment—largely directed toward AI infrastructure and data center expansion—overshadowed the otherwise strong financial performance. Shares have since fallen roughly 11% from their recent highs.
AI Madness Raises Capital Intensity Concerns
Like other major technology companies, Alphabet is investing tens of billions of dollars into artificial intelligence models and the data centers required to train and deploy them at scale. The global race for AI craze has significantly increased capital intensity across the sector.
Data center expansion presents practical challenges as well. Securing sufficient electricity and water supply has become increasingly complex, with regulatory constraints and infrastructure bottlenecks slowing development in key regions.
Investors appear increasingly focused on the risk that near-term free cash flow could come under pressure as spending accelerates. While AI may unlock long-term revenue streams, the timing and magnitude of monetization remain uncertain.
Long-Term Debt Sparks Debate
Adding to investor scrutiny, Alphabet recently issued a 100-year bond, a rare move that drew criticism from some market observers.
Hedge-fund manager Michael Burry warned that the issuance could signal a peak in corporate dominance, comparing it to Motorola’s 100-year bond issuance in 1997. Motorola, once among the top U.S. companies by market capitalization, experienced a steep decline in relevance and valuation in the years that followed.
While the comparison is controversial and the structural context differs significantly, the commentary has added another layer of debate around Alphabet’s long-term strategic positioning.
Key Technical Levels Come Into Focus
From a chart perspective, Alphabet has slipped below its 50-day moving average near $320 which now represents an important near-term resistance zone. The break below it has opened the door to a deeper retracement toward the psychological $300 level and below it.
GOOGL Chart Daily – Heading Toward the 50 SMA Again
Apple Partnership Fails to Offset Macro Pressure
Alphabet’s strategic agreement with Apple to integrate its Gemini AI models into a redesigned Siri platform represents a meaningful validation of its AI capabilities. Embedding Gemini into Apple’s ecosystem expands Google’s AI reach across hundreds of millions of devices globally.
From a strategic perspective, the partnership strengthens Alphabet’s competitive standing in consumer-facing AI. However, the announcement has not insulated the stock from broader market pressure.
Investors remain focused on macroeconomic headwinds and capital discipline rather than long-term adoption milestones.
A Delicate Balance Between Growth and Discipline
Alphabet’s fundamentals remain robust, with record revenue, strong profit growth, and expanding AI capabilities. Yet the stock’s recent reversal highlights a broader market recalibration.
As spending accelerates and macro risks persist, investor confidence may hinge less on revenue growth and more on capital efficiency and disciplined execution. The longer-term AI opportunity remains substantial—but in the near term, valuation and risk appetite are shaping price action more than operational strength.
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