Alphabet opened at $344.17 on Wednesday, sitting below its 50-day moving average of $352.87 but above the 200-day average of $341.28. The stock has had a flat August, and that sluggishness traces back to one thing: capex.
After Alphabet raised its AI capital spending plan from $180 billion to $205 billion in its Q2 earnings report, Wall Street got nervous. Overspending concerns have kept pressure on the stock, even as the underlying business numbers look strong.
Q2 results were hard to argue with. Alphabet reported EPS of $9.11, crushing the $2.89 analyst estimate. Revenue came in at $119.80 billion, ahead of the $117.07 billion consensus. Net margin stood at 54.77% and return on equity at 51.32%.
Google Cloud Platform was a standout. GCP revenue hit $24.8 billion in Q2, up 82% year-over-year. Alphabet is shifting enterprise contracts to let clients use Gemini to test AI models, and those clients are now paying for Gemini and custom chips as part of their regular workflows.
That’s a meaningful shift. Google is turning its AI model into a high-margin software business, not just a research project. The Cloud business and Gemini are feeding each other.
Institutional investors have taken notice. Nolet Wealth Management raised its GOOGL stake by 89.9% in Q2, adding 2,475 shares to reach 5,228 total, valued at around $1.87 million. Sequoia Financial Advisors added 48,805 shares in Q2, bringing its total to 485,486. Hedge funds and institutions now own 40.03% of the company.
The biggest institutional move came from Berkshire Hathaway. Warren Buffett disclosed an 83% increase in Berkshire’s GOOGL position in Q2, adding roughly 48 million shares to reach about 106 million, worth approximately $37 billion. Buffett said he initiated the investment himself, citing strong cash generation and attractive valuation.
Other high-profile names also added to their positions. David Tepper, Stanley Druckenmiller, and Seth Klarman were among those filing new or increased GOOGL purchases in the quarter.
On the analyst side, Needham holds a $450 price target, China Renaissance raised its target to $485 and rates the stock “Buy,” and HSBC holds a “Buy” with a $420 target. The consensus across 54 analysts sits at “Buy” with an average target of $419.86, about 22% above current levels.
Alphabet also announced a quarterly dividend of $0.22 per share, payable September 14th to stockholders of record on September 7th. The annualized yield is 0.3%.
On the negative side, Pomerantz LLP announced an investor investigation into Alphabet, though no findings or wrongdoing have been established. Insider John Kent Walker sold 8,998 shares at $349.29 on June 29th, reducing his position by 10.68%.
The 12-month trading range sits between $196.60 and $408.61, with the current price of $344.17 leaving plenty of distance to the consensus target.
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