Alphabet stock fell over 4% after the European Union ordered Google to open Search and Android data to rivals. The order adds to concerns over a delayed Gemini 3.5 Pro launch.
The pullback erased most of a rally sparked days earlier by Warren Buffett’s public endorsement of the stock. Shares changed hands near $353 on Thursday, down from above push toward $370 days earlier, per TradingView data.
Gemini Delay Meets a Costly AI Buildout
Alphabet is reportedly facing delays in launching Gemini 3.5 Pro, its next flagship AI model. CEO Sundar Pichai had signaled a June release. Engineers are said to still be working on coding performance and now, some researchers reportedly worry rival models now outperform Gemini on enterprise benchmarks.
The delay lands as Alphabet guides to $180 billion to $190 billion in capital spending this year alone. That buildout already forced the company into reversing its buyback strategy. It also drove an $80 billion equity raise that Berkshire helped anchor.
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. That figure is what investors will watch most closely for evidence AI spending is converting into revenue, after Alphabet’s stronger earnings reaction than rivals last quarter.
Regulators Add to the Pressure
The European Commission ordered Google on Thursday, July 16 to open 11 Android features to rival AI assistants. It also ordered Google to share anonymized Search data with competitors, including OpenAI, under the Digital Markets Act. The Android changes take effect with the next major Android version in July 2027. Search data sharing begins in January 2027.
Google objected to the order in a statement.
“Europeans’ private searches would be exposed to unfamiliar companies, without adequate anonymization of the data and without user knowledge or consent. This would weaken citizens’ privacy, risk business trade secrets, and endanger national security,” he said in a statement.
Separately, The EU could issue Google a fine next week in a related Digital Markets Act investigation. That would mark a second, distinct regulatory action within days. US antitrust litigation over Google’s search dominance is also drawing fresh institutional attention.
Buffett’s Vote of Confidence
Against this backdrop, Buffett’s endorsement stands out. Speaking with CNBC’s Becky Quick, the Berkshire Hathaway chairman confirmed he built the position. Successor Greg Abel did not initiate the trade, he said.
Berkshire’s stake now tops $31 billion, ranking behind only Apple and American Express among its holdings. Buffett tempered the praise, though. He said Alphabet is not among his four or five favorite Berkshire-owned businesses.
He also flagged the same capital intensity worrying the broader market. Buffett called the AI spending race “real money.” His comments in his CNBC interview echoed the same caution about chasing near-term results over real returns.
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