Google Shares Sink as AI Boom Forces Alphabet to Go Back on Strategy Critical to its Stock
Google stock fell after parent Alphabet (GOOGL) announced an $80 billion equity raise to fund artificial intelligence (AI) infrastructure. The move reverses years of buybacks that steadily shrunk its share count.
Shares slipped after the June 1 announcement, with GOOGL opening down roughly 3.5% on Tuesday. Investors weighed dilution against management’s bet that AI demand justifies the largest fundraising shift the company has undertaken in years.
Alphabet (GOOGL) Stock Performance. Source: Google Finance
A Big Reversal for Google Stock Buybacks
Alphabet has spent more than $346 billion repurchasing stock since 2016. Those purchases cut shares outstanding by approximately 13% from a 2019 peak.
The program lifted earnings per share and supported the stock through market volatility.
Google Stock Buybacks 2015-2026
The new plan reverses that posture. It includes a $30 billion concurrent public offering and a $40 billion at-the-market program. The latter begins in the third quarter.
“Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced equity offerings totaling $80 billion, in expected aggregate amount, as part of its plan to fund investments in its world-class AI compute infrastructure to meet its unprecedented customer demand,” read an excerpt in the announcement.
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A $10 billion private placement reflects Berkshire Hathaway’s AI direction under chief Greg Abel.
AI Spending Drives the Reversal
Alphabet now expects 2026 capital expenditures of $180 billion to $190 billion, roughly double 2025 levels.
Another step-up is guided for 2027. Proceeds will fund data centers, custom chips, and the global AI compute buildout supporting Search, Cloud, and Gemini.
The capital intensity has drained Big Tech cash flow across hyperscalers. BlackRock has separately flagged AI capex risks to broader financial markets.
Berkshire agreed to buy $5 billion of Class A stock at $351.81 per share. It will also acquire $5 billion of Class C at $348.20. The anchor commitment did not fully offset dilution concerns.
Markets will now judge whether AI returns ultimately outweigh near-term dilution and the lost buyback support that fueled Alphabet’s rally.
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