AI capex plans drag on Alphabet and AMD

Alphabet’s (GOOGL) shares fell about 7% on July 24 after investors reacted negatively to its latest post-quarter update. The decline followed the company’s decision to significantly increase its capital expenditure plans tied to artificial intelligence infrastructure. Market participants focused more on this spending outlook than on otherwise solid segment revenue performance.

The updated guidance set Alphabet’s 2026 capital expenditures in a range of $195 billion to $205 billion. This planned level of investment, aimed at supporting AI-related projects and infrastructure, was cited as a primary factor in the stock’s sharp one-day drop. The reaction suggested investors were reassessing the trade-off between aggressive AI investment and nearer-term profitability.

Advanced Micro Devices (AMD) also came under pressure on July 24, with its stock trading down roughly 3.3%. The move followed the company’s results and took place against a weaker backdrop for the semiconductor sector. Investors weighed AMD’s performance in the context of a market that had become more cautious toward chip makers.

The decline in AMD’s shares was reported alongside selling across other semiconductor names. This suggested that company-specific news intersected with a broader shift in sentiment toward chips, particularly those exposed to AI infrastructure spending trends. As with Alphabet, investors appeared to scrutinize how future spending and demand might affect returns.

On July 24, commentary highlighted that investors were punishing large technology and semiconductor stocks even when they reported generally solid quarterly numbers. Concerns about surging AI infrastructure investment and capital expenditure plans overshadowed revenue strength in several high-profile names. Alphabet’s higher capex guidance became a focal example of this shift in priority.

The renewed focus on AI spending risks contributed to weakness in major U.S. indexes. Selling pressure in large-cap tech and chip stocks weighed on the broader market and left key benchmarks lower for the week. The episode underscored that, at current valuations, investors are closely monitoring how far and how fast companies plan to expand AI-related infrastructure.