Asian Stocks Decline Amid Soaring AI Investment Costs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy GOOGL?
Source: Newsfilter
- AI Investment Concerns: Asian stocks broadly declined due to worries over soaring AI investment costs, particularly impacting tech stocks, with approximately $830 billion in market value wiped out since January 28, indicating investor anxiety about future profitability.
- Google's Capex Surge: Alphabet, Google's parent company, is projecting capital expenditures of $175 billion to $185 billion for 2025, significantly above analyst expectations, and despite shares dropping over 6% at one point in after-hours trading, they ultimately settled just 0.4% lower, reflecting mixed market sentiment regarding its long-term growth potential.
- Chip Sector Volatility: Disappointing earnings from AMD led to a 17% drop in its stock, while Nvidia rallied nearly 2% on increased equipment spending demand, highlighting divergent market views on the semiconductor industry's outlook and exacerbating investor sentiment fluctuations.
- Yen Depreciation and Elections: The Japanese yen has depreciated for the fourth consecutive day, currently at 156.93 yen, as upcoming elections raise concerns over increased fiscal spending, impacting investor confidence in the yen amid worries about Japan's financial health.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOGL is 338.25 USD with a low forecast of 279.00 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
27 Buy
7 Hold
0 Sell
Strong Buy
Current: 339.710
Low
279.00
Averages
338.25
High
390.00
Current: 339.710
Low
279.00
Averages
338.25
High
390.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Advertising Revenue Growth: The growth of advertising revenue is a critical driver for Alphabet, particularly as it faces competition from other platforms; investors should monitor this area to assess future profit potential.
- Analyst Rating Changes: Roth Capital raised Alphabet's price target from $310 to $365, while Raymond James upgraded its rating from Outperform to Strong Buy, increasing the target from $315 to $400, reflecting optimistic market expectations for its future performance.
- Stock Price Dynamics: Alphabet shares are currently trading 0.80% higher at $342.34, indicating positive investor sentiment ahead of the earnings report, which may signal confidence in the company's future growth.
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- Alphabet's Response: Following the launch of ChatGPT, Alphabet declared a 'code red' and introduced Bard in February 2023, but initial inaccuracies led to an 8% drop in stock price in a single session, highlighting the challenges it faces in the AI era.
- Tech Integration and Recovery: After its initial misstep, Alphabet combined Google Brain and DeepMind to launch Gemini, considered superior to ChatGPT, which helped boost its stock price, while Google Search continued to show steady growth, demonstrating resilience amid the rise of AI platforms.
- Lessons for Investors: The over 20% sell-off in software stocks appears excessive, and investors should recognize that buying the dip, especially when no fundamental changes occur, often yields returns, as exaggerated threats from new technologies typically require time to materialize.
See More
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- Market Panic Intensifies: The iShares Expanded Tech-Software Sector ETF (IGV) has dropped 22% year-to-date as investors fear that new AI tools from companies like OpenAI and Anthropic could disrupt entrenched SaaS models, leading to a dramatic compression of valuations in the software industry, despite no significant impact on major software businesses yet.
- Lessons from Alphabet: Following the launch of ChatGPT in November 2022, Alphabet's stock fell 8% in a single day due to market skepticism about its response capabilities, highlighting that threats from new technologies are often exaggerated, and investors should focus on fundamental changes rather than emotional fluctuations.
- Investment Strategy Reflection: Although software stocks are currently facing a sector-wide sell-off of over 20%, historical evidence suggests that buying the dip, especially when there are no fundamental changes, often yields substantial returns, prompting investors to carefully assess the gap between market sentiment and actual value.
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See More
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See More
Asian Stocks Decline Amid Soaring AI Investment Costs
- AI Investment Concerns: Asian stocks broadly declined due to worries over soaring AI investment costs, particularly impacting tech stocks, with approximately $830 billion in market value wiped out since January 28, indicating investor anxiety about future profitability.
- Google's Capex Surge: Alphabet, Google's parent company, is projecting capital expenditures of $175 billion to $185 billion for 2025, significantly above analyst expectations, and despite shares dropping over 6% at one point in after-hours trading, they ultimately settled just 0.4% lower, reflecting mixed market sentiment regarding its long-term growth potential.
- Chip Sector Volatility: Disappointing earnings from AMD led to a 17% drop in its stock, while Nvidia rallied nearly 2% on increased equipment spending demand, highlighting divergent market views on the semiconductor industry's outlook and exacerbating investor sentiment fluctuations.
- Yen Depreciation and Elections: The Japanese yen has depreciated for the fourth consecutive day, currently at 156.93 yen, as upcoming elections raise concerns over increased fiscal spending, impacting investor confidence in the yen amid worries about Japan's financial health.
See More
Alphabet's Q4 Earnings Anticipation
- Earnings Expectations: Alphabet is expected to report earnings per share of $2.63 and revenue of $111.42 billion, having beaten estimates in the last four quarters, indicating strong profitability and market confidence.
- Advertising Revenue Growth: The growth of advertising revenue is a critical driver for Alphabet, particularly as it faces competition from other platforms; investors should monitor this area to assess future profit potential.
- Analyst Rating Changes: Roth Capital raised Alphabet's price target from $310 to $365, while Raymond James upgraded its rating from Outperform to Strong Buy, increasing the target from $315 to $400, reflecting optimistic market expectations for its future performance.
- Stock Price Dynamics: Alphabet shares are currently trading 0.80% higher at $342.34, indicating positive investor sentiment ahead of the earnings report, which may signal confidence in the company's future growth.
See More
Destiny Wealth Partners Acquires New Position in VCLT
- New Position Established: On February 2, 2026, Destiny Wealth Partners, LLC disclosed a new position by acquiring 163,615 shares of Vanguard Long-Term Corporate Bond ETF (VCLT), with an estimated transaction value of $12.57 million, indicating confidence in the long-term bond market.
- Asset Allocation Proportion: This acquisition positions VCLT as a new investment representing 1.4% of Destiny Wealth Partners' $871 million in reportable U.S. equity assets, reflecting a strategic diversification in their investment portfolio.
- Market Performance Analysis: As of February 2, 2026, VCLT shares were priced at $75.80, up 7.2% over the past year but trailing the S&P 500 by 9.83 percentage points, indicating relative performance pressure against the broader market.
- Yield and Investment Strategy: With an annualized dividend yield of 5.52%, VCLT aims to track the Bloomberg U.S. 10+ Year Corporate Bond Index, making it suitable for investors seeking long-term fixed income, particularly as expectations for interest rate cuts may attract more investor interest.
See More
Cloud Software Stocks Plummet Due to AI Fears
- Market Reaction: The iShares Expanded Tech-Software Sector ETF (IGV) has dropped 22% year-to-date, primarily due to investor panic over new AI tools from companies like OpenAI and Anthropic potentially disrupting traditional SaaS models, leading to a significant compression in valuations despite no substantial impact on major software businesses yet.
- Alphabet's Response: Following the launch of ChatGPT, Alphabet declared a 'code red' and introduced Bard in February 2023, but initial inaccuracies led to an 8% drop in stock price in a single session, highlighting the challenges it faces in the AI era.
- Tech Integration and Recovery: After its initial misstep, Alphabet combined Google Brain and DeepMind to launch Gemini, considered superior to ChatGPT, which helped boost its stock price, while Google Search continued to show steady growth, demonstrating resilience amid the rise of AI platforms.
- Lessons for Investors: The over 20% sell-off in software stocks appears excessive, and investors should recognize that buying the dip, especially when no fundamental changes occur, often yields returns, as exaggerated threats from new technologies typically require time to materialize.
See More
Software Stocks Plunge Amid AI Disruption Fears
- Market Panic Intensifies: The iShares Expanded Tech-Software Sector ETF (IGV) has dropped 22% year-to-date as investors fear that new AI tools from companies like OpenAI and Anthropic could disrupt entrenched SaaS models, leading to a dramatic compression of valuations in the software industry, despite no significant impact on major software businesses yet.
- Lessons from Alphabet: Following the launch of ChatGPT in November 2022, Alphabet's stock fell 8% in a single day due to market skepticism about its response capabilities, highlighting that threats from new technologies are often exaggerated, and investors should focus on fundamental changes rather than emotional fluctuations.
- Investment Strategy Reflection: Although software stocks are currently facing a sector-wide sell-off of over 20%, historical evidence suggests that buying the dip, especially when there are no fundamental changes, often yields substantial returns, prompting investors to carefully assess the gap between market sentiment and actual value.
- Future Investment Opportunities: While Alphabet did not make the Motley Fool's list of the top 10 stocks to buy, its ongoing innovations in AI and the resilience of Google Search may provide potential returns for future investors.
See More
Alphabet Forecasts 2026 Capital Expenditures Up to $185 Billion
- Capital Expenditure Forecast: Alphabet forecasts 2026 capital expenditures between $175 billion and $185 billion, with a midpoint of $180 billion, nearly double last year's spending, indicating strong confidence in future growth.
- Strong Earnings Report: In Q4 2022, Alphabet's revenue rose 18% to $113.8 billion, exceeding analysts' expectations of $111.5 billion, while adjusted earnings per share increased 31% to $2.82, showcasing significant profitability improvements.
- Cloud Business Growth: Cloud unit sales surged 47.7% to $11.9 billion, far surpassing the expected 35% growth, highlighting Alphabet's competitive edge in cloud computing, especially following Microsoft's lackluster performance.
- Market Sentiment Shift: Although the capital expenditure plan initially spooked investors, leading to a 0.5% decline in stock price, the release of strong earnings data shifted sentiment to 'extremely bullish', reflecting investor confidence in Alphabet's future AI strategy.
See More
Asian Stocks Decline Amid Soaring AI Investment Costs
- AI Investment Concerns: Asian stocks broadly declined due to worries over soaring AI investment costs, particularly impacting tech stocks, with approximately $830 billion in market value wiped out since January 28, indicating investor anxiety about future profitability.
- Google's Capex Surge: Alphabet, Google's parent company, is projecting capital expenditures of $175 billion to $185 billion for 2025, significantly above analyst expectations, and despite shares dropping over 6% at one point in after-hours trading, they ultimately settled just 0.4% lower, reflecting mixed market sentiment regarding its long-term growth potential.
- Chip Sector Volatility: Disappointing earnings from AMD led to a 17% drop in its stock, while Nvidia rallied nearly 2% on increased equipment spending demand, highlighting divergent market views on the semiconductor industry's outlook and exacerbating investor sentiment fluctuations.
- Yen Depreciation and Elections: The Japanese yen has depreciated for the fourth consecutive day, currently at 156.93 yen, as upcoming elections raise concerns over increased fiscal spending, impacting investor confidence in the yen amid worries about Japan's financial health.
See More
