Alphabet

Gemini

<h3 id="key-takeaways">Key Takeaways</h3>
<ul>
 <li>Alphabet shares retreated approximately 4% following news that Gemini 3.5 Pro’s launch was postponed after underwhelming internal performance metrics</li>
 <li>First quarter FY2026 earnings per share reached $5.11 versus analyst expectations of $2.63 — exceeding forecasts by 94% — while revenues climbed 21.8% to $109.90B</li>
 <li>Wedbush launched coverage with an industry-leading $671 price objective, characterizing the decline as a strategic entry point</li>
 <li>BMO Capital analyst Brian Pitz upgraded his price objective to $455 from $435, maintaining his Buy recommendation</li>
 <li>Among 64 Wall Street analysts tracking GOOGL, 57 recommend Buy or Strong Buy, with no Sell ratings issued</li>
</ul>
Alphabet (GOOGL) shares finished Friday’s session at $354.46, retreating approximately 4.44% from the opening price near $373. The catalyst: emerging reports indicating Google’s Gemini 3.5 Pro artificial intelligence model experienced delays after underperforming against internal quality standards.
<a href="https://knockoutstocks.com/stock/GOOGL" rel="noopener noreferrer nofollow"> <img src="https://knockoutstocks.com/api/stocks/GOOGL/embed" alt="GOOGL Stock Card"> Alphabet Inc., GOOGL </a>
The downturn occurred despite Alphabet delivering one of its most impressive quarterly performances in recent memory. First quarter FY2026 earnings per share registered at $5.11, nearly doubling the Wall Street consensus of $2.63 — representing a remarkable 94% earnings surprise. Total revenue reached $109.90 billion, marking a 21.8% year-over-year increase.
Google Cloud emerged as the quarter’s star performer, surging 63% to $20.03 billion while its project backlog nearly doubled sequentially. The current backlog now totals $460 billion.
Concerns around AI talent retention amplified selling pressure. Gemini co-leader Noam Shazeer recently moved back to <a href="https://coincentral.com/china-just-dropped-the-worlds-largest-open-ai-model-and-its-coming-for-anthropic-and-openai/" rel="noopener noreferrer nofollow">OpenAI</a> after a short stint at Google following the Character.ai transaction. Nobel Prize winner John Jumper also left DeepMind to join Anthropic. These high-profile departures sparked worries about Google’s competitive position in artificial intelligence development.
Despite market reaction, Wall Street analysts maintained their confidence.
<h3 id="wedbush-issues-most-aggressive-street-target">Wedbush Issues Most Aggressive Street Target</h3>
Wedbush analyst Ygal Arounian launched coverage Thursday with a Buy recommendation and a $671 price objective — marking the highest target among major firms. Arounian characterized the postponement as a “temporary blip” and positioned the market reaction as an attractive buying opportunity.
Reaching $671 would translate to nearly 90% appreciation from present trading levels.
BMO Capital’s top-rated analyst Brian Pitz maintained his conviction as well. He kept his Buy stance while increasing his price objective to $455 from $435, referencing upgraded <a href="https://coincentral.com/is-alphabet-googl-stock-a-buy-before-earnings-on-july-22/" rel="noopener noreferrer nofollow">Google</a> Cloud projections for Q4 and full-year FY2027, up 2% and 13% respectively. Pitz highlighted expanding infrastructure capacity and sustained cloud adoption as drivers behind his revised outlook.
The average analyst price target stands at $437.79, suggesting approximately 26% upside potential from Friday’s closing level. One optimistic forecast of $515 indicates possible gains of 45%.
<h3 id="market-wide-tech-sector-pressure-and-berkshire-s-entry">Market-Wide Tech Sector Pressure and Berkshire’s Entry</h3>
Friday’s weakness extended beyond Alphabet alone. Technology stocks broadly retreated, with AI-focused companies experiencing the sharpest declines. META decreased 3.19%, MSFT fell 2.14%, and NVDA declined 1.17%. GOOGL’s more pronounced drop suggests the Gemini news provided additional downward momentum.
Warren Buffett, now operating alongside successor Greg Abel, disclosed that Berkshire Hathaway established an Alphabet position via a $10 billion private placement. Buffett identified artificial intelligence infrastructure spending as a primary risk factor — Alphabet’s capital expenditures reduced free cash flow by 46.63% year-over-year in Q1.
Friday’s trading volume registered 10.79 million shares, significantly below the three-month daily average of 34.05 million.
Despite the session’s decline, GOOGL maintains an 11.11% gain year-to-date and has appreciated 91.54% over the trailing twelve months.
Among 64 analysts covering the stock: 14 rate Strong Buy, 43 rate Buy, 7 rate Hold, with zero Sell recommendations.
The post <a href="https://blockonomi.com/alphabet-googl-stock-slides-4-following-gemini-ai-setback-despite-record-earnings-beat/" rel="noopener noreferrer nofollow">Alphabet (GOOGL) Stock Slides 4% Following Gemini AI Setback Despite Record Earnings Beat</a> appeared first on <a href="https://blockonomi.com" rel="noopener noreferrer nofollow">Blockonomi</a>.

Alphabet (GOOGL) Stock Slides 4% Following Gemini AI Setback Despite Record Earnings Beat

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