Alphabet stock fell over 4% after the European Union ordered Google to share Search data with competitors and open Android features to rival AI assistants, beginning in January and July 2027 respectively.
The drop wiped out most gains from Warren Buffett's endorsement of Alphabet, though Buffett cautioned the company's $180 billion（約29兆円） to $190 billion（約30兆円） annual capital spending on AI is "real money" and raised questions about whether the buildout will generate returns.
The stock decline also reflects delays in launching Gemini 3.5 Pro, its next flagship AI model, and concerns that rival AI models now outperform Gemini on enterprise benchmarks.
What happened
Alphabet stock fell over 4% to near $353 after the European Union ordered Google to open Search and Android data to rival AI assistants and competitors. The EU ruling, effective January 2027 for Search data and July 2027 for Android features, came as the company faces delays launching Gemini 3.5 Pro, its next flagship AI model that CEO Sundar Pichai had signaled for June release.
Why it matters
The selloff erased most of a rally sparked by Warren Buffett's public endorsement of Alphabet, with Berkshire's stake now topping $31 billion（約5兆円）. However, Buffett cautioned that Alphabet is not among his four or five favorite Berkshire-owned businesses, and he flagged the same capital intensity worrying the market—Alphabet is guiding to $180 billion（約29兆円） to $190 billion（約30兆円） in capital spending this year alone, a spending level he called "real money." The regulatory pressure compounds investor concern that Alphabet's costly AI buildout may not convert into revenue growth fast enough.
What to watch
Wall Street expects Alphabet to post second-quarter earnings per share near $2.86, up nearly 24% year over year, when it announces on July 22. Google Cloud grew 63% last quarter to nearly $20 billion（約3.2兆円）—the metric investors will watch most closely for evidence AI spending is converting into revenue. A second EU fine in a related Digital Markets Act investigation could arrive within days, and the company is also facing US antitrust litigation over its search dominance.
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Alphabet faces a rare convergence of pressures—regulatory, competitive, and financial—that has shaken investor confidence even as Warren Buffett made a public bet on the company. The EU's Digital Markets Act order, delivered July 16, mandates that Google expose both Search data and Android system features to competitors including OpenAI, a shift that strikes at the heart of Google's moat in search and mobile ecosystems. Although the compliance deadline is still 12–18 months away, the ruling signals that regulators are willing to act and may do so again; a second EU fine in a related Digital Markets Act probe could arrive within days, and US antitrust litigation over Google's search dominance is also drawing fresh institutional attention.
Simultaneously, Alphabet is burning capital at an unprecedented pace—$180 billion（約29兆円） to $190 billion（約30兆円） in capital spending this year—while its signature next-generation AI model, Gemini 3.5 Pro, reportedly faces delays and engineering challenges. The buildout has forced the company to halt share buybacks and raise $80 billion（約13兆円） in equity (anchored by Berkshire), yet the connection between that spending and revenue growth remains unproven. Google Cloud did grow 63% last quarter to nearly $20 billion（約3.2兆円）, which Wall Street will scrutinize for proof that AI investment is monetizing, but that metric alone may not satisfy skeptics worried that Alphabet is chasing near-term AI headlines at the expense of disciplined returns.
Buffett's endorsement—and his caution—encapsulates the market's ambivalence. He confirmed Berkshire built a $31 billion（約5兆円） position, but stopped short of ranking Alphabet among his four or five favorite holdings, and he explicitly echoed market concerns about the "real money" being spent on AI. His measured stance suggests that even a long-term value investor sees Alphabet as a bet on execution under pressure, not a straightforward endorsement of the company's strategic direction.
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