Nearly $300 billion in market value evaporated as Alphabet posted its worst day since May 2025 after investors recoiled at the cost of its AI buildout.
$44.9 billion in second-quarter capital spending—double a year earlier—helped push free cash flow to a record negative $5.9 billion, while Alphabet raised full-year spending guidance to $195 billion-$205 billion and signaled another increase in 2027.
That selloff sharpened a broader Wall Street concern that hyperscalers may have to sacrifice cash generation to stay competitive in AI; Tesla fell 20% for the week after its own AI-heavy spending and weak earnings.
Markets were also navigating a separate risk shock: Brent crude climbed above $100, the 2-year Treasury yield reached 4.35%, and traders priced in renewed inflation risks and possible Fed tightening.