Alphabet’s Week in Review: 5.3% Drop as New Data Center Deals Announced

Core Viewpoint - Alphabet's stock has experienced a significant decline, driven by concerns over capital expenditures and regulatory challenges, despite some positive developments in acquisitions and infrastructure expansion [2][5]. Group 1: Stock Performance - Alphabet's stock dropped 5.29% this week, closing at $306.02, which is a sharper decline compared to the S&P 500 and Nasdaq-100 [2]. - Year-to-date, Alphabet is down 2.48%, underperforming both the S&P 500 and Nasdaq-100 indexes [2]. Group 2: Capital Expenditures - Alphabet's capital expenditure guidance for 2026 is set at $175-185 billion, aimed at AI buildout and cloud expansion, causing concern over near-term profitability [3]. - To fund this expansion, Alphabet issued $20 billion in multi-tranche bonds, including a rare 100-year sterling bond worth £1 billion, which further impacted the stock negatively [4]. Group 3: Regulatory Developments - EU regulators approved Alphabet's $32 billion acquisition of Wiz, clearing a significant antitrust hurdle, which provided a temporary boost to the stock [5]. - However, regulatory pressures persist, with the European Publishers Council filing an antitrust complaint against Google regarding the use of publisher content and the UK's Competition and Markets Authority enforcing app store changes [5]. Group 4: AI Infrastructure Expansion - Alphabet announced Project Mica, a $10 billion data center campus in Kansas City, requiring up to 500 megawatts of power [6]. - The company secured a 15-year, 1 GW solar capacity agreement with TotalEnergies for its Texas data centers, representing 28 TWh of renewable energy [6]. - Google increased its stake in TeraWulf to 14%, supporting the expansion of the Lake Mariner data center as TeraWulf shifts focus from bitcoin mining to AI infrastructure [6].