Investors are on edge as Alphabet's ambitious capital expenditure plans raise eyebrows, while AMD faces a steep decline in the market.
On February 3, 2026, outside the Google headquarters in Mountain View, California, the atmosphere was tense.
David Paul Morris | Bloomberg | Getty Images
In its recent quarterly report, Alphabet significantly surpassed Wall Street's expectations for both earnings and revenue, showcasing remarkable growth in its cloud division with a nearly 48% revenue increase year-over-year. This impressive performance, however, comes with a caveat: the tech powerhouse has projected its capital expenditure for 2026 to be between $175 billion and $185 billion. If it hits the higher end of that range, it would represent more than double the capex from the previous year. This bold financial strategy seems to have unsettled investors, leading to a drop in Alphabet's stock price by as much as 3% during after-hours trading.
The broader landscape for artificial intelligence stocks has not been any kinder this week. Advanced Micro Devices (AMD) experienced a dramatic 17.3% fall in its share price during regular trading hours following a less-than-optimistic forecast for the first quarter of the year. Other companies linked to AI, such as Broadcom and Oracle, also saw their stock prices dip amid the turmoil.
Reflecting the day's market trends, the tech-heavy Nasdaq Composite index fell by 1.51%, and the S&P 500 index also retreated, sliding 0.51%, marking its fifth losing session out of six. In contrast, the Dow Jones Industrial Average managed a modest gain, rising 0.53%, buoyed by strong performances from Amgen and Honeywell.
Despite the prevailing pessimism surrounding AI investments, Jim Cramer, the creator of CNBC's Investing Club, remains optimistic about South Korean semiconductor firms. He described Samsung Electronics and SK Hynix as "visionary" companies, expressing a desire to work for them if he were living in South Korea.
In the oil markets, prices dipped by approximately 1% following news that U.S. and Iranian officials would be engaging in discussions in Oman this coming Friday.
In related oil news, Venezuela reassured China that its oil pricing would not be dictated by U.S. interests, while Russia insisted that India had not announced plans to halt oil purchases from Moscow, countering suggestions made by former President Trump.
— Report contributed by CNBC's Jennifer Elias.
What You Should Know Today
The Hong Kong and Macao Affairs Office of the State Council issued a stark warning to Panama, stating that the nation will face severe repercussions if it does not change its current trajectory. This remark came after a ruling from the Panama Supreme Court that invalidated the port operating license of Hong Kong-based CK Hutchison, widely interpreted as a win for Trump.
Senator Tim Scott expressed his belief that Federal Reserve Chair Jerome Powell did nothing wrong during his testimony before the Senate last year. Meanwhile, Senator Thom Tillis intensified efforts to block the nomination of Kevin Warsh for Fed chair until the investigation into Powell's actions concludes.
The U.S. government is looking to establish critical mineral price floors in collaboration with Mexico, the European Union, and Japan, according to statements from the U.S. trade representative. The Trump administration has prioritized critical minerals in its trade and industrial strategies to decrease reliance on China.
Major U.S. stock indices predominantly faced sell-offs on Wednesday, with the S&P 500 suffering consecutive losses, primarily driven down by technology stocks. Meanwhile, the pan-European Stoxx 600 index remained mostly stable. Notably, shares of Novo Nordisk, a company listed in Denmark, plummeted by 17.2% due to concerns about future earnings guidance.
Analysts are increasingly worried about AMD's profitability, raising questions about the chipmaker's operational costs and overall financial health. This concern is echoed in reports circulating on Wall Street.
And finally...
For Chinese enterprises, the focus is less about which artificial intelligence system is the smartest and more about how AI tools can help them navigate a challenging economic landscape.
As investors ponder whether the U.S. or China will emerge victorious in the race for artificial intelligence supremacy, many Chinese companies are asking a more pragmatic question: Which AI solutions can support their survival?
This underscores a critical point that investors who make decisions solely based on perceived superiority might be missing out on a more significant narrative.
