GOOGL Down 7% in the Past 3 Months: Buy, Sell or Hold the Stock?

Alphabet's shares have declined 7% over the past three months as capital expenditure doubled to $44.9 billion to fund AI infrastructure buildout, pushing the company into negative free cash flow of $5.855 billion. The spending surge reflects management's commitment to competing in generative AI despite immediate pressure on cash generation.

Google Cloud delivered an 82% revenue jump to $24.8 billion with a backlog of $514 billion, providing evidence that enterprise customers are committing to the platform. The cloud unit's momentum offers a counterweight to concerns about search market share erosion and regulatory challenges facing the core advertising business.

Zacks Investment Research rates GOOGL a Hold, citing balanced risk-reward as the market waits for proof that AI investments will convert into durable free cash flow expansion. The negative cash flow represents a sharp departure from Alphabet's historical capital-light model, making the timing and magnitude of returns critical to the investment case.