Alphabet Inc.'s Class C shares (GOOG) declined 2.48% on Friday, settling at $323.10 and marking a fourth straight daily drop. Trading volume was elevated at approximately 33.7 million shares. The stock finished the week roughly 7.7% below its 52-week high, underperforming a broader market that trended upward.
Investors Question AI Spending Spree
The sell-off reflects mounting investor apprehension toward major technology firms' ambitious capital expenditure plans for artificial intelligence infrastructure through 2026. With projections reaching hundreds of billions for data centers and semiconductors, the market is increasingly scrutinizing the timeline and magnitude of expected returns. "We're seeing a de-risking trade," noted Andrew Wells of SanJac Alpha, highlighting a shift away from the previously uniform bullish sentiment on AI investments.
Capital appears to be rotating out of expensive megacap names and into cheaper sectors. "The selloff in the names that carried markets higher may have paused," said Tim Murray of T. Rowe Price, adding that investors are now "chasing to buy cheaper companies." This selectivity is evident even within the elite "Magnificent Seven" cohort, where performance diverged on Friday; Microsoft (MSFT) gained 1.90%, while Meta Platforms (META) and Amazon (AMZN) fell 1.31% and 5.55%, respectively.
Insider Sale Adds to Narrative
A regulatory filing this week disclosed that Alphabet CEO Sundar Pichai sold 32,500 Class C shares on February 4, with prices ranging between $330 and $344. The filing indicated the transaction was part of a pre-arranged Rule 10b5-1 trading plan. While such sales are often scheduled, they tend to draw attention during periods of stock price weakness.
The core concern for investors is whether the massive AI build-out will eventually pressure margins and delay profitability, potentially leading to a continued reassessment of high-valuation tech stocks. Alphabet, as a leading "hyperscaler" in cloud and data-center operations, sits at the center of this debate.
Market Awaits Key Economic Data
With U.S. markets closed over the weekend, focus turns to upcoming economic releases that could influence interest rate expectations and risk appetite. The Labor Department's jobs report is scheduled for release on Wednesday, February 11, followed by the Consumer Price Index (CPI) inflation data on Friday, February 13. U.S. equity markets will also be closed on Monday, February 16, for the Presidents Day holiday.
Alphabet's stock performance following these economic reports will serve as a critical test of investor patience with the company's long-term AI investment strategy.
