Alphabet Shares in Correction Territory as Investors Question Returns on AI Build-Out

Alphabet’s shares are trading in “correction territory,” as investors question returns on the company’s rapidly expanding AI build-out. The article says Alphabet shares are down 13% from May all-time highs, reflecting concerns that capital expenditures are rising faster than the compute and revenue they produce. CNBC’s MacKenzie Sigalos cites an estimated spending pace of nearly $200 billion this year, with Q2 capex expected to double year over year, and Bank of America projecting spending approaching $300 billion in 2027. Reported Q2 capex reached $44.924 billion, up 100.14% year over year, versus $35.67 billion in Q1. Funding has also changed: Alphabet raised more than $140 billion in debt and equity since October, suspended share repurchases, and posted Q2 free cash flow of -$5.9 billion.