Alphabet faces heightened scrutiny from investors as a delay in the launch of a model key to its AI ambitions adds to worries ​over the payoff from massive data-centre spending, months after raising expectations with a ‌blockbuster quarter for cloud sales.

The Google parent — set to report second-quarter results on Wednesday — has delayed from June the launch of its next flagship model, Gemini 3.5 Pro, built especially to catch up with rivals in the ​lucrative market for AI coding tools and agentic AI tasks.

The setback has raised concerns ​as Chinese open-source models increasingly challenge top U.S. labs for customers amid ⁠growing worries about steep AI bills that have also fanned fears that Big Tech could ​be over-building capacity.

"While Google is missing the boat on AI coding and that's a very real ​growing concern ... Google's strategy is all about the ecosystem," said Dave Wagner, portfolio manager at Aptus Capital Advisors.

Alphabet increased its 2026 capital expenditure guidance to between $180 billion and $190 billion in April and has announced plans to ​raise about $85 billion in equity offerings, including an investment from Berkshire Hathaway.

Alphabet shares are down ​about 9% since late April — when it posted a 63% jump in cloud sales — lagging other so-called "Magnificent Seven" ‌stocks during the period.

The company has also lost high-profile employees, including Gemini co-lead Noam Shazeer and Nobel laureate John Jumper, a key Google DeepMind executive, to rivals.

Analysts have said Google's advantage in the AI race lies in its ownership of a large consumer distribution network, on top of its AI ​models, cloud infrastructure and ​custom silicon.

Overall, Alphabet ⁠shares remain nearly 13% higher for the year, making it the second-best performer among the Mag 7 group.

Analysts expect the company's second-quarter revenue growth ​to ease only slightly from the first three months of 2026, ​as the cloud ⁠business drives results.

Alphabet is expected to post a 21.3% rise in revenue for the April-June period to $116.93 billion, according to data compiled by LSEG. Cloud sales are estimated to grow at a ⁠similar 64% ​pace, while ad revenue is forecast to expand at ​a slower 13.7%.

The cloud business has benefited from growing deals for Google's custom AI chip business, including multi-billion-dollar agreements with ​Meta Platforms and Anthropic.