Alphabet (GOOG, GOOGL) is falling today because Wall Street is suddenly staring at three ugly things at once: Google is losing major AI people, rivals are getting louder in the AI race, and the company is spending eye-watering money to keep up.
The stock fell by approximately 7 percent by the closing bell on Monday, making it its biggest one-day decline in about a year.
On Tuesday, investors will be looking to see if Google can retain its top talent, defend its Gemini strategy, and generate value from large-scale investments in artificial intelligence before its margins look sloppy.
Google loses key AI figures as competition continues to poach talent
The first issue here is talent. Just last week, Noam Shazeer, Google’s vice president of engineering and one of the architects behind the Gemini AI model, announced he was moving on to join OpenAI. This is not a trivial move either, as Noam had only joined Google less than two years ago, which means that it could give investors cause for concern and make them wonder about the situation inside the company.
Namely, he had come back in August 2024 together with researcher Daniel De Freitas as part of the partnership between Google and Character.AI. Together, the two of them had founded Character.AI after quitting Google back in 2021. They were supposed to beef up DeepMind, Google’s major AI engine. Now one of the two key figures has left once more.
This move comes at a particularly bad time. Google had recently shown its new AI offerings at its annual I/O developer conference, revealing its latest creations, such as Gemini 3.5 Flash and the Gemini Spark AI agent. So instead of discussing their new offerings, investors will also be interested in who leaves them.
Then came another hit. On Friday, John Jumper, DeepMind vice president and engineering fellow, announced that he was leaving after nine years to join Anthropic. John is known for helping build AlphaFold, the AI system that has mapped more than 200 million protein structures and cut huge time from biology and medical research. He also won a 2024 Nobel Prize with Google’s Demis Hassabis.
The talent fight is now brutal. Meta Platforms (META), Apple (AAPL), Tesla (TSLA), Microsoft (MSFT), OpenAI, and Anthropic are all chasing top AI minds. OpenAI and Anthropic are also planning IPOs, which adds another reason for researchers to look at private rivals with big upside.
Google has already been through major AI restructuring. In April 2023, it combined DeepMind and Google Brain. DeepMind was bought in 2014 for about $500 million, while Google Brain started inside the company in 2011. Demis now runs DeepMind. Another co-founder, Mustafa Suleyman, left Google in early 2022, later started Inflection AI, and now leads Microsoft’s consumer AI business.
Alphabet spends heavily as investors question the payoff from AI
Secondly, Alphabet has borrowed about $141 billion in equity and debt financing since October and has been investing heavily in AI.
The decline in the stock price followed an interview by Microsoft’s CEO, Satya Nadella, with the Sunday Wall Street Journal. In his interview, Satya urged companies to be less reliant on “AI Giants” and stated that the market for AI had become commoditized.
Google’s stock has been mostly rallying since its first-quarter results were announced on April 29, owing to the good performance of its cloud and search ads businesses.
However, the upcoming bills are huge. Google sees that in 2026, capital expenditures may be as high as from $180 billion to $190 billion, which is more than twice higher than in the previous year. Even before, the old bill ranged between $175 billion and $185 billion. And the company noted that the bill in 2027 will grow very much. All the budget goes on building AI data centers and model training.
On the other hand, the battle for products continues. Google’s Gemini 3 series received close attention in 2025 due to reasoning, multimodal models, and benchmark results. However, in 2026, the Claude series by Anthropic gained much popularity in the code field.
Despite being one of the best stocks in terms of performance, the Alphabet stock still gets an IBD Composite Rating of 94/99, placing it higher than 90, which is associated with high-growth stocks. Its Accumulation/Distribution Rating, on the other hand, stands at D for the past 13 weeks.
