Alphabet Drops 3% on $205B AI Capex as Futures Slip
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- Alphabet shares fell 3% in extended trading after raising its 2026 capital expenditures forecast to as high as $205 billion, citing strong AI demand — a move that hits as investors have grown more cautious about hyperscaler AI spending.
- U.S. equity futures slipped with Dow futures down 69 points (0.1%), S&P 500 futures off 0.2%, and Nasdaq 100 futures down 0.3%.
- Oil prices moved higher Wednesday after the U.S. launched another round of strikes against Iran, with Secretary of State Marco Rubio saying Tehran was "not serious about talks."
- Fundstrat's Hardika Singh said investors' attention has gravitated back toward the war and that sustained oil gains could keep inflation elevated and complicate the Federal Reserve's rate path.
- Notable after-hours movers included Rollins (-10% on a Q2 miss), Shutterstock (-10% after suspending its quarterly dividend and former CEO Paul Hennessy stepping down effective July 13), and Medpace Holdings (+19% on a Q2 beat).
- Thursday's earnings calendar features Dow, American Airlines, T-Mobile, Union Pacific, and Norfolk Southern before the bell, with Intel reporting after the close; weekly jobless claims arrive at 8:30 a.m. ET.
Why it matters: Alphabet's $205 billion 2026 capex ceiling — a major escalation of hyperscaler AI infrastructure spend — rattled a market already growing skeptical of AI payoff timelines, and the 3% after-hours drop signals investor patience is thinning. Layered on top, fresh U.S. strikes on Iran pushed oil higher and reopened the inflation math just as traders were pricing in a calmer Fed path; with Intel, T-Mobile, and Dow on deck Thursday, the next test of how much AI spending the market will tolerate arrives within hours.
