Wall Street sends clear signal to Google
Large technology companies may need to explain their AI investment plans more clearly to the market. Parent company Alphabet's stock price fell 7% on Thursday after the company disclosed that capital expenditures will rise again this year, with a large amount of funds being used to purchase AI chips, servers and build data centers. The decline has swallowed up almost all of the stock's gains this year. It is true that the overall market sell-off was generally attributed to rising oil prices and the escalating conflict with Iran. But Alphabet was among the biggest losers, Also under pressure: Tesla reported a sharp jump in capital spending on Wednesday, sending its shares tumbling 15% on Thursday. Tesla's stock price is more tied to Elon Musk's personal enthusiasm than to real operating fundamentals, making it difficult to judge valuation using rational logic; but Alphabet's logic is completely different. There is no doubt that Google has an excellent advantage in the AI track among technology giants with its handheld chips, self-developed AI models, and mass consumer software that can undertake AI upgrades. But even for Alphabet, investors are inevitably wondering how much money the company will have to invest to realize its AI dividends. Alphabet’s latest forecast calls for full-year capital spending to top $205 billion, more than double what it spent in 2025, which itself was nearly three times the size of two years ago. Chief Financial Officer Anat Ashkenazy said on Wednesday that capital expenditures will "continue to rise significantly" next year. Newberg Berman analyst Dan Flakes judged on The Information's financial program TITV today that Alphabet's capital expenditures next year are likely to exceed US$300 billion. S&P Global Market Intelligence data shows Alphabet's consensus forecast for operating cash flow next year will be $259 billion. According to estimates, Alphabet may experience a net cash burn of US$40 billion next year. Before the previous aggressive investment expansion, the company had been steadily generating $60 billion to $70 billion in free cash flow all year round. Now the situation is reversed. When will the massive money burn bottom out? Alphabet management was vague. CEO Sundar Pichai has repeatedly emphasized that the industry-wide AI transformation is still in the "starting stage of the competition," which means that the high-investment cycle will continue for a long time. Ashkenazy said on Wednesday: "As long as the return on investment is attractive, we will continue to increase investment." To put it bluntly, we want the market to choose trust. But this rhetoric is now difficult to convince capital. Meta’s AI propaganda logic is puzzling Coinbase makes large-scale personnel changes to senior management Cryptocurrency platform Coinbase is undergoing its largest management shakeup in recent years. The company announced today that Chief People Officer Lawrence Bullock will step down from his position and become a company consultant. Another person familiar with the matter revealed that Greg Tusar, co-head of Coinbase’s institutional business, was transferred to a new position to be responsible for policy affairs. Earlier this month there was news that chief legal officer Paul Grewal was leaving to join a start-up. Last week, executive Jesse Pollack admitted that the previous business line focusing on creator tokens had failed and would no longer be in charge of the Base public chain project. This round of personnel changes occurred during the downturn of the crypto industry. Coinbase is transforming from a single cryptocurrency trading platform to a "full-category comprehensive exchange" with one-stop trading covering stocks, prediction markets, and crypto assets. The company simultaneously promoted cost reduction: it completed layoffs in May, laying off 14% of its employees. At the same time, the company promoted internal personnel to replace a number of old management.