GOOGL: Alphabet Stock Down 15% from Record as Traders Eye Q2 Earnings Report

Big tech giant will headline a busy week of earnings releases. Capex guidance will be a big figure to watch for.

👀 All Eyes on Alphabet

• Alphabet shares GOOGL were little changed in premarket trading Monday but remain roughly 15% below their record high above $400.
• Investors are now counting down to Wednesday's earnings release, where one report could decide whether the recent pullback was a buying opportunity — or a warning shot.
• Wall Street expects earnings of $2.87 per share on $117 billion in revenue, up about 6% from a year ago. That's a solid target, but expectations for big tech rarely stop at simply "meeting estimates."
• Alphabet headlines one of the busiest weeks of earnings season alongside Tesla, while IBM returns to the spotlight after its preliminary results triggered one of the biggest single-day collapses in the company's history.

💰 AI Gains Did Heavy Lifting

• Alphabet posted a record $62.6 billion in net income during the first quarter, but there's an important footnote: nearly half of that came from unrealized gains on its investments in Anthropic and SpaceX, rather than its core advertising and cloud businesses.
• The company owns roughly 14% of Anthropic, whose valuation exploded from $380 billion at the end of Q1 to $965 billion after a fresh funding round. That surge translated into an estimated $80 billion paper gain for Alphabet.
• Those gains are unrealized, meaning Alphabet hasn't actually sold anything. The higher valuation increases the accounting value of its stake, boosting reported earnings without bringing cash through the door.

🖥️ Capex Is the Real Story

• Beyond earnings, investors will be laser-focused on capital expenditure, or capex — spending on long-term assets like AI data centers, servers and chips. In today's AI race, capex has become almost as important as profits, just in reverse.
• With AI demand accelerating, memory prices climbing and Alphabet recently raising fresh capital, analysts expect management could increase its 2026 capex guidance to roughly $200 billion, about 5% above previous expectations.
• In other words, Wednesday isn't just about how much Google earned. It's about how much it's willing to spend to stay ahead in AI. On Wall Street these days, the biggest number isn't revenue — it's the size of the shopping list.