Alphabet Forecasts $175–185B AI Capex as Shares Slide 7.28%
Gene Munster of Deepwater Asset Management says AI is still in its second inning with utility breakthroughs possible in 6–12 months. Alphabet Inc Class C shares dropped 7.28% in five days as the company plans $175–185 billion in 2026 AI capex.
1. Analyst Reassesses AI Timeline
Gene Munster, managing partner at Deepwater Asset Management, said this week that the artificial intelligence industry remains in its second inning. He argued that meaningful AI utility breakthroughs could emerge within the next six to 12 months, challenging longer-term adoption timelines.
2. Market Reaction
Shares of Alphabet Inc Class C declined by 7.28% over the past five trading days as investors weighed rising AI infrastructure costs against uncertain near-term returns. Class A shares fell 7.06%, and broader tech names also saw pressure due to elevated capital spending.
3. Capital Expenditure Plans
Alphabet expects to allocate $175–185 billion to capital expenditures in 2026, driven by AI training and inference infrastructure. Management highlighted that inference—real-time AI processing—will be the primary cost driver over the next decade as applications scale.