Google Parent Alphabet's Stock Tumbles Amid Worries Whether AI Spending Will Pay Off

Core Insights - Alphabet's shares fell nearly 8% amid concerns over weaker-than-expected cloud growth and increased spending on AI [2][6] - The company plans to invest up to $75 billion in capital expenditures this year, exceeding Wall Street's expectations by $15 billion [3] - Analysts have lowered their price targets for Alphabet, with UBS reducing it from $211 to $191 and JPMorgan from $232 to $220, citing the need for new products to justify the higher investment [3][4] Investment and Growth Potential - Despite the concerns, some analysts believe that the increased investment in AI could enhance growth by expanding Alphabet's cloud capacity [5] - Bank of America maintains a "buy" rating and a price target of $225, suggesting that Wall Street may be underestimating the benefits of AI for Google Search monetization in 2025 [5] - The lower price targets come in the context of competition from Chinese AI startup DeepSeek, which claims to develop AI models at a fraction of the cost of American firms [4]