Someone at Google’s Silicon Valley HQ saw Nvidia’s little tumble last week and thought, "Hold my beer."

Alphabet’s stock is down 8% this morning, and it’s kind of a self-inflicted wound considering Google decided that the best way to handle slowing cloud growth was to throw even more money at AI… despite the fact that, you know, they aren’t actually making more money.

Google reported Q4 earnings and, at first glance, things didn’t seem that bad. They beat on earnings per share ($2.15 vs. $2.13 expected) and were pretty much on the money with revenue ($96.4B vs. $96.6B expected). Their search and YouTube ad revenue actually grew… hitting $72.4 billion and $10.5 billion.

But then the stink bomb dropped… Google Cloud brought in just $11.9 billion, falling short of the expected $12.1 billion.

Cloud was supposed to be Google’s star player, the future-proof business that could stand toe-to-toe with Microsoft and Amazon. Instead, growth is slowing, and instead of addressing that, Alphabet decided to jack up capital expenditures from $57.9 billion to $75 billion.

If there’s anything Wall Street hates more than Gamestop, it’s when companies spend money they don’t have to. And they really hate when they do it while missing revenue expectations.

Google's CFO, Anat Ashkenazi, tried to calm investors down, saying the company was "capacity constrained"... meaning: they didn’t have enough data centers to keep up with demand. So naturally, the fix is to spend an extra $17 billion on more servers, data centers, and networking equipment.

To be fair, they need the infrastructure if they want to keep up in the AI arms race. But there’s a slight problem… AI is a money pit, and right now, Google isn't monetizing it well enough to justify the expense. Their AI-powered search features aren’t driving the kind of engagement they hoped for, and DeepSeek (the Chinese AI upstart) just proved you can build top-tier AI on a ramen noodle’s budget.

Alphabet investors took one look at this and collectively noped out, sending shares down as low as $188 today, after closing at $206.38 after yesterday’s closing bell.

For comparison, Microsoft’s cloud revenue also missed expectations, but their stock didn’t face nearly as much pain. Probably because Microsoft isn’t spending money like a drunk Powerball winner. Google, on the other hand, is giving off "trust me, bro" vibes when it comes to its AI spending.

Let’s not forget, Google still has regulatory nightmares on its hands. There’s the DOJ’s antitrust case that could break up their search monopoly, the China probe that might retaliate against U.S. tariffs, and the lingering uncertainty around TikTok’s fate (which could shift digital ad spending overnight).

All of this means Alphabet is in “show-me” mode… investors want proof that AI investments will actually pay off. Until then, investors are happy to keep dunking on them.

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Stock.News has positions in Alphabet, Microsoft and Amazon.