SerpApi.Org
Alphabet'sGOOGL surge in capital spending isn't the only thing worrying Wall Street, judging by the internet giant's second-quarter earnings call with analysts. Google stock fell on Thursday as investors mulled capital spending and other issues, such as whether Alphabet is suddenly lagging in the race to build more powerful artificial intelligence models.
Google reported Q2 financial results late Wednesday. Wall Street analysts peppered Google management over Gemini AI models on the Q2 earnings call. One concern is that Google has been losing top AI researchers to rivals.
When Google rolled out its Gemini 3 family in late 2025, the models won favorable reviews. But much has changed, with Anthropic in particular in the spotlight.
Meanwhile, Google Chief Executive Sundar Pichai said the company has begun its most ambitious pretraining run yet for the Gemini 4 model family. Pichai also said Google remains a formidable competitor in a tight race.
"I think the frontier is incredibly dynamic space and it's fiercely moving forward," Pichai said. "At any given moment when you take a snapshot it feels dynamic. We have had clearly frontier models. There are many attributes on which we are still at the frontier. There are areas where we've acknowledged we need to improve — coding and agentic decoding is an example of that, and I think the teams are very, very focused on it."
AI Model Competition Intensifies
He added: "Demand for our models is translating to strong token usage across developers and enterprise customers, and we continue to be supply constrained, a sign of momentum and rapid adoption."
Google is behind schedule on delivering Gemini 3.5 Pro, its most powerful flagship AI intelligence model, as rivals gain momentum. Google competes with Anthropic, OpenAI, SpaceX'sSPCX xAI, Meta PlatformsMETA and Chinese companies in developing AI systems.
Anthropic recently released its Fable models, earlier code-named Mythos. Meanwhile, OpenAI has launched GPT-5.6 Sol, its most capable model ever, in limited previews.
Google is still in the "very early innings (of a) secular shift across multiple areas in our core information businesses," Pichai said on the Q2 earnings call. "In terms of the frontier, we are both very committed and very confident of being at the frontier. For the next generation of frontier, you're going to need a much larger base models. We are now training Gemini 4 and we are being very ambitious with it. I am very excited by the progress I'm seeing internally on Gemini 4, and I'm confident the people will be pleased when we are putting it outside, but we will need Gemini 4 as a larger base model to compete at that frontier level."
At Google I/O in May, the company introduced an upgraded Gemini 3.5 model as well as "Omni," a new AI model initially focused on video generation.
In early trading on the stock market today, Google stock fell more than 5% to 323.21.
Google Stock Technical Ratings
Google stock holds an IBD Composite Rating of 80 out of a best-possible 99, according to IBD Stock Checkup. The Composite Rating combines five IBD ratings of a stock's fundamental and technical performance into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
But Google stock holds an Accumulation/Distribution Rating of only E, according to IBD MarketSurge. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading to discern trends in buying and selling by large institutional investors. (A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.)
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
YOU MAY ALSO LIKE:
Tesla Earnings Miss Despite Strong EV Sales; Elon Musk Preaches Robotaxi Caution
Monitor IBD's 'Breaking Out Today' List For Companies Hitting New Buy Points
IBD Digital: Unlock IBD's Premium Stock Lists, Tools And Analysis Today
Futures: AI Dives Again, These Groups Strong; SpaceX In Focus
