After Losing $700 Billion in Market Cap, Is Alphabet Stock a Buy?

By Keithen Drury – Apr 4, 2026 at 9:10AM ESTKey PointsAlphabet has emerged as an artificial intelligence (AI) leader.Google Cloud's growth justifies its massive capital expenditures. Big tech stocks have had a rough couple of months. Alphabet (GOOG 0.20%) (GOOGL 0.57%) hasn't escaped the sell-off and currently has a $3.5 trillion market cap after reaching $4.2 trillion earlier this year. That's basically the equivalent of an ExxonMobil being erased from Alphabet's market cap, so this is no small sell-off. But is Alphabet stock worth buying now, or does it have more room to fall? Let's take a look. Image source: Getty Images. Alphabet recently surged in the AI arms race Last year, Alphabet was practically left for dead by investors. There were questions surrounding the future of the Google Search platform and whether Alphabet could transition into this new age of artificial intelligence (AI). However, it seamlessly made the transition and has solidified the Google Search engine as one of the top ways the average person interacts with AI. Google's generative AI platform, Gemini, is also one of the most used models out there and is winning the battle against several fierce competitors. Its cloud computing platform, Google Cloud, is also growing at an incredible pace. In Q4, Google Cloud's revenue rose 48% year over year -- the fastest of any of the major cloud competitors. That's because Google Cloud is becoming a popular place to build AI applications on, with one of the biggest factors being its custom chips, which can provide better cost performance for running AI applications. ExpandNASDAQ: GOOGLAlphabetToday's Change(-0.57%) $-1.69Current Price$295.70Key Data PointsMarket Cap$3.6TDay's Range$289.47 - $298.0852wk Range$140.53 - $349.00Volume839KAvg Vol34MGross Margin59.68%Dividend Yield0.28% Alphabet's business is doing great, but if there's one cause to tie the stock's recent drop to, it's Alphabet's capital expenditure (capex) plans. For 2026, the company plans to spend between $175 billion and $185 billion in capex, mostly going toward data center construction. That's a massive chunk of Alphabet's cash flows, and investors are worried about what the return on investment will be. However, Alphabet's response would likely be that AI is too important a technological shift not to participate in. While investors may want to see Alphabet do something else with this money, I think this is the right move and will pay off over the long term. In the meantime, Alphabet's stock looks like a solid buy, as it's trading at valuation levels not seen in several months. Data by YCharts. At 25 times forward earnings, Alphabet isn't necessarily "cheap," as it still has a premium to the broader market. But, if you've been waiting to buy Alphabet stock, I think now is a perfect time to scoop up shares, although there are some better deals in the market available. Read NextApr 4, 2026 •By Neil PatelNearly 40% of Billionaire Bill Ackman's Hedge Fund Is Invested in 3 Monster AI StocksApr 4, 2026 •By Jason Hall1 Reason I'm Never Selling Alphabet StockApr 4, 2026 •By Danny Vena, CPAWhat Is the Jevons Paradox and What Does It Mean for Micron and Sandisk Investors After Google's Revolutionary AI Breakthrough?Apr 3, 2026 •By Daniel SparksNvidia and Alphabet Both Have Amazing Potential in an AI Era.

But Which Stock Is the Better Buy Right Now?Apr 3, 2026 •By Geoffrey SeilerAlphabet vs. Microsoft: The Better Growth Stock to Buy During the Great RotationApr 2, 2026 •By Keithen DruryGot $1,000? 3 Unstoppable Tech Stocks to Buy and Hold Forever.About the AuthorKeithen Drury is a contributing Motley Fool technology analyst covering AI, semiconductors, cybersecurity, and SaaS stocks. In addition to The Motley Fool, Keithen is a mechanical engineer and has held roles at Honeywell and smaller industrial companies like Brand Hydraulics and Lincoln Industries. He holds a bachelor’s degree in mechanical engineering from Dordt University.TMFTripleOptionStocks MentionedAlphabetNASDAQ: GOOGL$295.70(-0.57%)-$1.69AlphabetNASDAQ: GOOG$294.46(-0.15%)-$0.44*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.