Alphabet shares traded lower by approximately 1% in the $348 to $357 range as investors evaluated the company's artificial intelligence spending and revenue outlook ahead of Q2 earnings. Google launched three new Gemini AI models—Gemini 3.6 Flash, Gemini 3.5 Flash Cyber, and Gemini 3.5 Flash-Lite—while Wells Fargo raised its price target to $438 from $416. The stock movement occurs as major technology companies face increased scrutiny over rising AI infrastructure costs and future returns from large data-center investments.
Alphabet Stock Trades Lower Ahead of Q2 Earnings
Alphabet shares moved around the $348 to $357 range as traders assessed whether Google's AI products can support stronger cloud and advertising growth. Wall Street expects Alphabet to report about $116.98 billion in Q2 revenue. The earnings report will arrive at a time when major technology companies face closer scrutiny over rising AI infrastructure costs and future returns from large data-center spending.
Google Cloud remains a major focus because of its growing role in Alphabet's AI strategy. The company is also working with a large contracted revenue backlog, which analysts view as a key support for future cloud growth.
Wells Fargo analyst Ken Gawrelski raised Alphabet's price target to $438 from $416 while keeping an Overweight rating. The updated target implies roughly 25% upside from the current trading range.
Google Launches Three New Gemini AI Models
Google released three new artificial intelligence models as competition with OpenAI, Anthropic, Meta, and Chinese AI firms continues. The new lineup includes Gemini 3.6 Flash, Gemini 3.5 Flash Cyber, and Gemini 3.5 Flash-Lite.
Gemini 3.6 Flash is described as Google's most powerful Flash model. The company designed the model to improve performance on tasks such as coding, finance, and broader enterprise use cases.
Gemini 3.5 Flash Cyber is focused on cybersecurity work. Google said the model can find and patch security flaws at a lower cost than larger AI systems. Google said Gemini 3.5 Flash Cyber found 55 problems in V8 JavaScript Engine during testing. The company also said 10 vulnerabilities had not been found by any other model before.
The company also introduced Gemini 3.5 Flash-Lite for lower-cost tasks involving AI agents. These systems can support digital assistants that manage workflows, review information, and complete routine actions.
Tulsee Doshi, a senior director of product management on Google's Gemini team, said the new Flash models were built "to meet the sweet spot of efficiency and quality." Google also said the models use 17% fewer tokens than earlier versions, lowering developer costs.
Alphabet Develops New AI Server Chip for Efficiency Gains
Alphabet is also working on a new AI server chip designed to run Google models more efficiently. The chip is expected to directly integrate the blueprint of the Gemini AI model. Developers estimate the chip could be six to ten times more efficient than the latest version of Google's existing AI chips.
AI infrastructure spending remains a key issue for investors. Higher chip and memory costs have raised estimated capital expenditure per gigawatt by 22%, adding pressure across large cloud providers. Wells Fargo expects cloud companies such as Google Cloud to pass some higher infrastructure costs to customers.
Google is also preparing a flagship model called Gemini 3.5 Pro, which is expected to become one of its highest-performing systems. The company had planned a June rollout, but the model remains in testing. Google said Gemini 3.5 Pro will be made "broadly available as soon as it's ready."
FAQ
What did Google announce regarding new AI models?
Google released three new artificial intelligence models: Gemini 3.6 Flash, Gemini 3.5 Flash Cyber, and Gemini 3.5 Flash-Lite. Gemini 3.6 Flash is described as Google's most powerful Flash model designed for coding, finance, and enterprise use cases. Gemini 3.5 Flash Cyber focuses on cybersecurity and found 55 problems in V8 JavaScript Engine during testing, including 10 vulnerabilities not found by any other model before.
Why did Alphabet stock decline despite new AI model launches?
Alphabet shares traded lower by approximately 1% in the $348 to $357 range as investors evaluated the company's artificial intelligence spending and revenue outlook ahead of Q2 earnings. The stock movement occurs as major technology companies face increased scrutiny over rising AI infrastructure costs, with estimated capital expenditure per gigawatt up 22%.
What is Wells Fargo's updated price target for Alphabet?
Wells Fargo analyst Ken Gawrelski raised Alphabet's price target to $438 from $416 while keeping an Overweight rating. The updated target implies roughly 25% upside from the current trading range of $348 to $357.
