Alphabet stock drops on AI exits, analysts eye cloud growth

Alphabet shares fell up to 7% after top AI leaders left, raising concerns about talent loss and heavy AI spending. Some analysts remain bullish due to strong cloud growth.

Alphabet's stock faced notable volatility, dropping between 3% and 7% following several high-profile departures from its artificial intelligence teams. John Jumper left DeepMind for Anthropic, while Noam Shazeer, co-lead of Gemini AI models and co-author of the influential Transformer paper, moved to OpenAI. These exits, coupled with concerns over Alphabet's projected $190 billion AI infrastructure spending by 2026 and an $80 billion equity raise, have heightened investor anxiety about the company's ability to maintain AI momentum and monetize its investments. Despite these challenges, some analysts remain optimistic. 24/7 Wall Street issued a buy rating with a $445 price target, citing robust Google Cloud growth—revenue jumped 63% year-over-year to $20 billion, and the cloud backlog nearly doubled to $462 billion. The broader tech sector also declined, with Amazon, Meta, and Microsoft each losing over 2%.