Alphabet (GOOGL) stock fell sharply today: Why Alphabet (GOOGL) stock crashed today, Feb 5: what happened to Alphabet shares as the US stock market turned deep in red
Google’s parent company shocked analysts by predicting infrastructure spending to hit up to $185 billion in 2026; this was approximately $65.5 billion higher than the expected $119.5 billion. This aggressive “AI-first” pivot comes at a time when the S&P 500 fell 0.8%, its sixth loss in seven trading sessions.
While CEO Sundar Pichai emphasized that AI was driving “expansive” growth in search, the sheer size of the $185 billion budget (exceeding the company’s total spending in the previous three years combined) sparked fears about sudden margin compression and long-term return on investment (ROI).
The sell-off quickly spread beyond a single stock. S&P 500 shifted 0.8%is extending its losing streak after recently reaching an all-time high. Dow Jones Industrial Average fell further 300 pointsAnd Nasdaq Composite fell near 1%Technology stocks came under pressure. At the same time, alternative and defensive assets were sold off sharply. Bitcoin falls below $70,000silver fell further 12%and gold almost fell %2It captures weeks of explosive gains.
Alphabet’s earnings lag but AI capital spending dominates investor reaction
Alphabet Class A shares fall by more than 100,000 4% around $319While Class C shares almost fell 4%It wiped out tens of billions of dollars in market value within hours.
Alphabet’s quarterly results showed continued strength in its core businesses. Reached revenue excluding partner payments $97.23 billionby beating $95.2 billion Consensus estimate compiled by Bloomberg. Advertising remained resilient. Search usage has reached record levels. Cloud revenue continued to grow. The quarter was solid on most traditional metrics.
The problem wasn’t today’s performance. He was spending tomorrow. Alphabet tells investors capital spending could increase 185 billion dollars in 2025with 2026 spending alone is expected to exceed the company’s total spending of the previous three years. Most of this money will go data centers, custom AI chips, servers and network infrastructureall aiming to power productive AI products across Search, Cloud, YouTube and enterprise services.
chief executive officer Sundar Pichai He defended the strategy by saying investments are already translating into higher utilization and monetization opportunities. He argued that AI expands rather than destroys Alphabet’s core business. Still, markets reacted quickly. Alphabet shares fell this much 7% intradayAlthough the stock continues to rise roughly, it is experiencing its steepest decline since May 64% in the last 12 months.
The concern for investors is timing. While artificial intelligence infrastructure expenditures are immediately reflected in cash flow, it may take years for the returns to be fully realized. This is creating short-term margin pressure at a time when valuations on U.S. tech stocks remain historically high.
US stock market suffers losses as tech weakness spreads
Alphabet’s decline reinforced a broader pullback in U.S. stocks already underway. Technology stocks once again led the market lower, pulling major indexes down for a time sixth of seven sessions Since the S&P 500’s last record high.
Sales were not limited to a single company. Semiconductor and hardware names also struggled. Qualcomm shares fell further 9% The company beat earnings expectations but issued a softer-than-expected outlook, citing memory shortages and cautious phone demand. The reaction mirrored Alphabet’s experience: solid current results were overshadowed by forward-looking concerns.
Apart from technology, Estee Lauder reported earnings above forecasts but warned tariffs could be roughly wiped 100 million dollars made a profit this financial year. Shares nearly collapsed 17%It strengthens the market’s sensitivity to cost pressures and policy risks.
Economic data also added to the cautious tone. Weekly jobless claims came in higher than expected, and a separate report from Challenger, Gray & Christmas showed: 108,435 layoffs announced last monthHighest monthly total since October and worst January reading since January 2009. While absolute levels remained low by historical standards, investors seized on these figures as a sign that the labor market could cool faster than expected.
Bond yields fall as rate cut expectations reemerge
While stocks fell, bonds rallied. Treasury yields fell across the curve following the employment data, reflecting rising expectations. Federal Reserve We may have to cut interest rates later this year to support economic growth.
10-year Treasury yield dropped to around 4.23%roughly downwards 4.29% previous session. Low yields usually support growth in stocks, but this time the move was driven by concern rather than optimism. Investors are increasingly weighing the risk that slowing employment and increased layoffs will negatively impact corporate earnings in coming quarters.
Markets globally followed Wall Street’s decline. European stocks fell after this statement Bank of England And European Central Bank both kept interest rates steady. In Asia, South Korea’s Kospi index almost fell 4%with Samsung Electronics to fall 6%just a few days after a sharp rise.
The synchronized move underscored a broader shift towards risk reduction as investors reassessed valuations, policy outlooks and the sustainability of recent rallies.
Bitcoin, gold and silver are on sale as risk appetite decreases
The most dramatic moves of the day came in commodity and crypto markets. Silver prices collapsed by more than 12 percentSharp swings continue after last week’s sudden reversal of momentum. Gold fell almost 2 percent to $4,855 per ounceafter dating recently $5,600. Both metals have roughly doubled in the past year, driven by demand for perceived safe havens amid political uncertainty, heavy government debt and stock market valuations.
bitcoinGold, often described as “digital gold,” also sold quickly and briefly fell under $70,000 after reaching the top $124,000 In October. The simultaneous decline in stocks, crypto and precious metals pointed to broad risk reduction rather than a simple return to safety.
Analysts noted that extreme price increases rarely follow a straight line. As expectations around interest rates, growth and liquidity reset, assets that benefited most from speculative inflows became vulnerable to rapid pullbacks.
