Alphabet's Gemini 3.5 Pro Is Late and the Stock Is Slipping. Is the AI Leader Falling Behind?
2026-07-19 20:23
•Daniel Sparks •The Motley Fool
••••• •••• Axe Capital view
Alphabet’s AI Delay Clouds Stock Momentum
A late AI launch dents Alphabet’s stock, but strong cloud growth keeps the story alive.
Alphabet’s much-anticipated Gemini 3.5 Pro AI model is behind schedule, which has dented investor confidence, reflected in a 15% drop from early 2026 highs. While the delay fuels fears that rivals like OpenAI and Anthropic are gaining ground, Google’s core business remains healthy. Google Cloud revenue jumped 63% year-on-year, with a backlog doubling to $460 billion. This means demand from enterprises is strong, suggesting that Google’s AI delay isn’t yet a critical issue. For South African investors, the primary takeaway is how the USD/ZAR might behave alongside global tech tensions. If Alphabet struggles, we could see a weaker dollar, which might ease some rand pressure. Still, this is a nuanced play since the rand’s direction also depends heavily on domestic factors like commodity prices and local policy. The delay is a red flag, but not a death knell. If Google solves its coding issues quickly, it could reclaim momentum. this is just my opinion and not financial advice
Watch USD/ZAR closely for signs of risk-on or off moves triggered by tech sector pressures. Avoid rushing into South African tech counters exposed indirectly to global tech disruptions like Naspers or Prosus just yet.
- USD/ZAR
- Naspers
- Gemini 3.5 Pro delays prolong, ceding AI leadership
- Rand volatility driven more by domestic issues than global tech shifts
6/10
Google's flagship AI model Gemini 3.5 Pro is months behind its promised June launch date as the company works to improve coding capabilities, raising concerns about competition from OpenAI and Anthropic. Alphabet's stock has declined 15% from its 2026 peak. However, strong Q1 results show Google Cloud revenue grew 63% year-over-year and the cloud backlog nearly doubled to $460 billion, suggesting customer demand remains healthy despite the delay.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Daniel Sparks
Categories: Equities, Earnings, Technology, AI, Semiconductors
Tickers: GOOG, GOOGL, GOOGM, GOOGN
Sentiment: Neutral - Mixed signals: negative on the delayed Gemini 3.5 Pro launch and stock decline of 15%, but positive on strong Q1 fundamentals (22% revenue growth, 63% Google Cloud growth, $460B cloud backlog). The delay is concerning but not yet indicative of a broader competitive disadvantage based on current business metrics.
Keywords: Gemini 3.5 Pro, AI model delay, Google Cloud, artificial intelligence, competitive pressure, coding capabilities, capital expenditure
Insights:
- GOOG: Neutral: Mixed signals: negative on the delayed Gemini 3.5 Pro launch and stock decline of 15%, but positive on strong Q1 fundamentals (22% revenue growth, 63% Google Cloud growth, $460B cloud backlog). The delay is concerning but not yet indicative of a broader competitive disadvantage based on current business metrics.
- GOOGL: Neutral: Mixed signals: negative on the delayed Gemini 3.5 Pro launch and stock decline of 15%, but positive on strong Q1 fundamentals (22% revenue growth, 63% Google Cloud growth, $460B cloud backlog). The delay is concerning but not yet indicative of a broader competitive disadvantage based on current business metrics.
- GOOGM: Neutral: Mixed signals: negative on the delayed Gemini 3.5 Pro launch and stock decline of 15%, but positive on strong Q1 fundamentals (22% revenue growth, 63% Google Cloud growth, $460B cloud backlog). The delay is concerning but not yet indicative of a broader competitive disadvantage based on current business metrics.