Alphabet Just Delivered a Piece of AI-Related News That Sent Its Stock Tumbling. Should You Buy the Dip, or Run for the Hills?
Alphabet's attractive valuation doesn't tell the entire story.
Overview
Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) released its operating results for the second quarter of 2026 (ended June 30) after the market closed on Wednesday. Once again, artificial intelligence (AI) fueled strong revenue growth in important businesses like Google Search and Google Cloud.
However, Alphabet said it plans to spend even more on AI data centers during 2026 than originally expected, which made investors uneasy. These capital expenditures (capex) could seriously hurt the company's earnings power over the next few years, and thus lead to sluggish returns in its stock.
Details
Alphabet stock immediately fell by around 7% following the release of the Q2 report, and it's now down 20% from its recent all-time high. Could this be the ultimate buying opportunity for long-term investors?
Source
Originally published at www.fool.com.