Alphabet Inc. shares extended their decline ahead of the Presidents Day holiday, closing down 1.1% at $306.02. The drop marked the fourth consecutive negative session for the technology giant, with its market capitalization falling by approximately $87.96 billion since the start of 2026, leaving it near $3.7 trillion according to Reuters data. Trading activity resumed on Tuesday following the market closure on Monday.
Investor Patience Wears Thin on AI Investments
Market participants are increasingly scrutinizing the returns on massive artificial intelligence infrastructure investments. Alphabet recently projected its 2026 capital expenditures to reach between $175 billion and $185 billion, a staggering figure that has drawn significant attention across the technology sector. This capital spending, commonly referred to as capex, is directed toward assets such as data centers and semiconductor chips essential for AI development.
The company's stock performance lagged behind major indices on Friday, as both the S&P 500 and Dow Jones Industrial Average finished in positive territory. Alphabet shares continue to trade below their recent 52-week high.
Financing Expansion Through Debt Markets
To fund its ambitious growth plans, Alphabet accessed global debt markets last week with a $31.51 billion bond offering. Notably, this issuance included a rare 100-year tranche that provided minimal protections for investors. Julia Khandoshko, CEO of broker Mind Money, observed that "what stands out is what's missing" in the bond terms, highlighting the aggressive financing strategy. CreditSights senior analyst Jordan Chalfin noted the enormous capital demands required for the current wave of AI infrastructure development.
According to Reuters calculations, combined 2026 capital expenditures for Alphabet, Microsoft, Amazon, and Meta are projected to reach at least $630 billion. BNY's Jason Granet described the century bond as both "representative and indicative" of the scale of investment flowing into technology markets.
Regulatory Challenges in Europe
European regulators are intensifying their examination of Google's business practices. The European Commission has raised concerns with advertisers that the company may be "artificially increasing" the clearing price in its Search advertising auctions, according to a document reviewed by Reuters. Google maintains that its Search ad prices are determined through real-time auctions that consider competitive factors and ad quality. Advertisers have until March 2 to submit their responses to the regulatory inquiry.
Separately, the European Publishers Council filed an antitrust complaint last week against Google's AI Overviews feature, arguing that automatically generated search summaries threaten the economic model supporting the open web. EPC chairman Christian Van Thillo stated that "AI Overviews and AI Mode fundamentally undermine the economic compact that has sustained the open web." Google has dismissed these allegations as inaccurate and pointed to existing controls that allow publishers to manage their content.
Market Context and Upcoming Events
As markets reopen, attention returns to interest rate dynamics, with technology stocks particularly sensitive to movements in bond yields. The Federal Reserve will release minutes from its most recent meeting on Wednesday at 2 p.m. Eastern Time. In the semiconductor sector, Nvidia is scheduled to report quarterly results after market close on February 25.
Alphabet executives are participating in industry events this week, with CEO Sundar Pichai and Google DeepMind head Demis Hassabis appearing at India's AI Impact Summit in New Delhi. They will join representatives from OpenAI and other industry leaders, with Hassabis scheduled to speak on Thursday.
The fundamental risk facing Alphabet and its peers remains clear: substantial current expenditures with potentially delayed returns on investment. This dynamic continues to create uncertainty among investors evaluating the long-term profitability of transformative AI investments.
