"Alphabet ( NASDAQ:GOOG) stock is officially in correction territory after falling in sympathy with many of its heavy-spending peers in the Magnificent Seven. Undoubtedly, Alphabet is also spending handsomely, but as investors become overly focused on the 2026 spending figure, they risk losing track of the long-term opportunity at hand. Of course, there are also risks of spending $185 billion, but, at the same time, that seems to be the price of staying at or around the front of the AI frontier model pack."
"Of course, one can look at the latest results and judge the trajectory based on whether AI has worked its way into the numbers yet. But what's more encouraging, at least in my humble opinion, is the pace of profound AI innovation. We're talking AI-native platforms that could have the potential, not only to disrupt a specific company's business model, but to disrupt entire industries or even sectors."
Alphabet stock has entered correction territory after falling with heavy-spending peers. Investors are focusing on a projected $185 billion 2026 spending figure while risking overlooking long-term AI-driven opportunity. Large-scale spending appears necessary to remain competitive at the AI frontier, though spending carries clear risks. The Magnificent Seven are leading the AI compute boom and many investors prefer dominant, AI-focused titans over struggling software and SaaS names. Spenders should be evaluated on proximity to monetization and next-level growth. Rapid AI innovation is producing AI-native platforms capable of disrupting company business models and entire industries.
Read at 24/7 Wall St.
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