Investors rotated into Alphabet stock after its shares climbed back above a key technical level despite AI spending concerns.
Alphabet (GOOG, GOOGL) shares rose above their 200-day moving average on Tuesday, reversing a three-year streak of trading below the benchmark. The rebound followed a broader sell-off in chip stocks, prompting investors to seek safety in Big Tech names previously pressured by AI-related spending fears.
The stock had fallen below the 200-day moving average on July 23 after second-quarter capital expenditures hit $44.9 billion, slightly above the $44.7 billion forecast. Full-year capex guidance was raised to $195 billion-$205 billion from $180 billion-$190 billion, with executives signaling higher spending into 2027.
The 200-day moving average is a widely tracked indicator, with trading above the level considered a long-term uptrend. The shift suggests renewed investor confidence despite lingering concerns over AI investment costs.