Alphabet Stock Price Slips As Search Growth, AI Departures Weigh
Has fallen 6% over the past month, lagging the S&P 500 as investors weigh search slowdown and talent departures from Google, DeepMind and Gemini, even as…
NEW YORK — Alphabet stock price has slid 6% over the past month, even as the S&P 500 rose 3%, with investors reacting to two concerns that have started to hang over the Google parent: slower-than-expected search growth and a wave of departures inside its AI ranks, according to Yahoo Finance data and Goldman Sachs Research.
The stock move has put fresh pressure on Alphabet shares at a time when the company is still posting strong numbers in parts of its business. The tension is clear. Traders want proof that AI spending will pay off, and they want it soon.
Why Alphabet stock price is under pressure
Eric Sheridan, business unit leader of the TMT Group within Goldman Sachs Research, said on Yahoo Finance’s Opening Bid that “There’s two debates that are weighing on Alphabet shares.”
“One, is that search slowed down a little bit more than investors expected [in the second quarter],” Sheridan said.
He pointed to a second issue as well: “The second bigger theme that’s weighed on it is there’s been brain drain,” Sheridan said. He cited departures from people at Gemini, Google, DeepMind and Google broadly, along with delays tied to Gemini’s next generation model, the 3.5 Pro. Alphabet is now talking about Gemini four.
That talent churn has become part of the market story around the company. Several prominent names have left or shifted roles, including Demis Hassabis and Jeff Dean.
Hassabis is now the former CEO of Google DeepMind and has moved into a chairman role at that unit. He has also taken the chief scientist title, while the role had previously been held by Jeff Dean. Dean left Alphabet after 27 years to start his own company with Google senior fellow Sanjay Ghemawat.
Sheridan said he did not know whether investors would ultimately see a direct business hit from the departures. “I don’t know that you’re going to see it,” he said. “I think they have a lot of talent. They have a very deep bench.”
Strong cloud growth is doing the heavy lifting
The stock weakness has come even as Alphabet’s second quarter showed strong momentum in some lines of business. Google Cloud was the standout, with revenue surging 82% to $24.8 billion.
Its cloud backlog also ballooned to $514 billion, a sign of heavy demand for AI infrastructure. That figure matters because it suggests customers are still lining up for computing power, even while investors argue over execution and leadership stability.
YouTube also grew, with revenue at $11.1 billion, up 13% from the prior year. But those gains have not fully offset worries around search and the pace of AI development.
For investors watching Alphabet stock price now, the question is no longer just whether the company can spend aggressively on AI. It is whether the people building that future stay in place long enough for the bet to work.
The next move will likely come from how Alphabet explains Gemini’s roadmap, and whether the market decides the recent share weakness is a warning sign or a temporary reset.
