Alphabet Stock Dips 15% From Peak, Poised for AI-Driven Gains

Alphabet stock has fallen 15% from its all-time high, and the company is positioned as a major winner in the AI boom, with upcoming earnings expected to potentially trigger a rally to new highs. Alphabet is investing heavily in AI, projecting data center capital expenditures between $195 billion and $205 billion for 2026, which is consuming all of its free cash flow. The company is already seeing results, with Google Search revenue growing 17% in Q2 and Google Cloud holding a $514 billion backlog. The stock trades at 22 times cash from operations, which is cheaper than Apple at 32 times and Nvidia at 41 times. Alphabet reports Q3 earnings later this month, where Google Cloud revenue growth could cross into triple-digit territory.