Alphabet stock falls 3% as Meta’s Muse AI raises competition

Alphabet's Google is launching Project Suncatcher, deploying AI chips in space via SpaceX's Transporter-18 mission. The initiative aims to overcome terrestrial infrastructure constraints. Google's Trillium TPUs underwent ground tests to ensure radiation resistance. The mission will test thermal management in space, with further tests planned for 2027. Commercial viability is years away, but investors may monitor progress.

Alphabet (GOOGL) and Meta (META) are investing heavily in AI. Alphabet has a $514B cloud backlog and raised its 2026 capital spending plan to $195B-$205B, increasing debt. Meta's revenue grew 28% YoY, with AI models boosting ad performance. Meta's 2026 spending is $130B-$145B. Alphabet trades at 13.5x EBIT, including investment gains, while Meta is at 16.4x.

ARK Invest, led by Cathie Wood, reduced its holdings in Alphabet (GOOGL) while increasing its stake in Rocket Lab (RKLB). As of July 31, 2026, ARKK held $118.5 million in GOOG and $27.0 million in GOOGL. Rocket Lab reported Q2 2026 revenue of $234.07 million, up 62% year over year, and announced plans to acquire Iridium Communications. Alphabet reported Q2 2026 revenue of $119.80 billion, up 24.23% year over year.

Tigress Financial raised Alphabet's (GOOGL) price target to $485 from $415, citing AI-driven growth in Search, Cloud, and YouTube. Q2 revenue grew 17% YoY for Search and 82% for Cloud. The firm maintains a Buy rating, highlighting Alphabet's AI investments and financial flexibility. Risks include high capital expenditures and competition. Hedge funds increased holdings, with Berkshire Hathaway and Fisher Asset Management raising stakes.

Bill Ackman's Pershing Square sold all Alphabet shares by June 2026 and increased its Meta Platforms stake by 20%. Meta's stock has risen 19% since, while Alphabet's has fallen, driven by Meta's AI product Muse. Pershing Square also added positions in Visa, Mastercard, S&P Global, and Netflix. Alphabet faces antitrust pressures and increased capital expenditure.

Alphabet's Google launched Gemini Robotics ER 2, an AI model for robots to plan and adapt tasks in real time. The model integrates with Google Search and works across multiple robot types. Alphabet's Class A shares were down over 1% in Thursday's morning trade. The company is investing heavily in AI, with a Q2 capital expenditure forecast of $195B-$205B. Other tech firms like Nvidia, Tesla, and Amazon are also advancing in physical AI and robotics.