Alphabet's AI Investments Spark Market Turmoil: What's Behind the 7% Drop?

Alphabet (GOOG/GOOGL) shares tumbled 7% despite reporting Q2 earnings that exceeded expectations with 24% revenue growth. The standout performance came from Google Cloud, which surged 82% with operating margins nearly doubling to 35.6%. However, the $195-$205 billion full-year capex guidance and $514 billion AI backlog raised concerns about execution risks. Senior strategist Ege Kaan: "This sell-off reflects Alphabet's unprecedented commitment to AI infrastructure. While the forward P/E of 21.3 appears reasonable, the $200 billion+ in data center investments creates significant near-term uncertainty."