Alphabet Stock Drops Over 6% as Gemini 3.5 Pro Delays and China's Kimi K3 Challenges Loom

According to Barron's, Alphabet (GOOGL) stock fell over 6% across two consecutive trading days through July 18, amid mounting concerns over its AI product roadmap and intensifying competition from Chinese rivals. The search giant faces two critical challenges: its next-generation Gemini 3.5 Pro model, originally promised for June, has been delayed due to underperformance in internal testing, particularly in code generation tasks, per Bloomberg's report citing sources familiar with the matter.

Additionally, Chinese AI startup Moonshot AI unveiled its latest model, Kimi K3, which independent testing firm Artificial Analysis found to rank higher than all Google models in intelligence benchmarks, compounding investor concerns. Alphabet is scheduled to report earnings on July 22, with analysts warning that any guidance increase in AI infrastructure spending without corresponding performance gains could trigger further market headwinds.