US Stocks Sink Further Amid Anxiety Over Alphabet’s Capex Plans

US stock markets slid further on Thursday, 5 February 2026, as investors reacted to big spending plans from Alphabet, the parent company of Google. The slide came amid growing unease about how much money tech companies are putting into future growth, especially in Artificial Intelligence (AI).

When Wall Street opened, the major indexes were all in the red. The Dow Jones fell by more than 600 (-1.22%) points to 48,896.26. The S&P 500 declined by 90.71 points (-1.32%) to 6,792.02. The NASDAQ dropped 384.59 points (-1.68%) to 22,519.99. While the S&P 500 slipped to a near two week low, the NASDAQ dropped to its lowest level in more than two months.

What About Individual Stocks?

Apart from the indices, individual stocks also faced the heat. Shares of Alphabet dropped sharply, falling as much as 7.8% during the trading session. Other big technology companies also struggled, with names like Microsoft, Amazon, Oracle and Tesla posting losses in the range of 3% to 4%.

Shares of Qualcomm, a major chip manufacturing company, shed over 8% after the company forecasted underperformance in the second quarter. Amazon’s shares also slipped by 3.5% ahead of the results.

What Caused This Slide?

A key trigger for Thursday’s decline in the US markets was Alphabet’s announcement that it plans to double its capital expenditure (capex) this year. This means the company will spend a lot more on things like data centres, servers, and artificial intelligence development. These kinds of investments can help build future growth, but they also raise questions about short-term profitability. Some investors took this news as a signal that big tech companies may be spending heavily without clear returns yet.

Besides Alphabet’s capex plans, weaker forecasts from Qualcomm added to the negative mood. Qualcomm warned that its revenue and profit could come in lower than expected in the coming quarter, which further spooked investors already cautious about the tech sector.

Many analysts think the heavy investment push into artificial intelligence is testing investors’ patience. Last year, AI was a top theme driving stock market gains. This year, however, there are signs that some investors are rethinking how quickly those investments will pay off. As a result, software and data services stocks have been under pressure and experiencing extended sell-offs.

Melissa Brown, SimCorp’s Managing Director, said, “The AI trade, which was the accelerant last year, is perhaps the extinguisher this year, with people realising that AI is going to help certain kinds of companies, but it is also going to hurt, particularly software, for example.”

What’s The Good News?

Not all parts of the market declined. Smaller companies, often seen as more affordable than big tech giants, drew some interest from investors. Consumer Staples, a defence-sector share, was trading in green. Shares of Snap were up by 5.6%. Tapestry and Hershey rose by 8% and 8.8%, respectively.

With more earnings reports on the calendar, especially from major AI-linked tech companies, investors will be closely watching whether the spending push leads to stronger profits in the long term.

Sources:

Economic Times

Reuters