Alphabet (GOOGL) shares plunge 3.14% as Michigan data center financing delays and regulatory scrutiny hit AI-linked stocks

Alphabet Inc. Class C (GOOGL) shares plunged 3.1424% in pre-market trading on December 18, 2025, as concerns over financing delays for a major $10 billion data center project in Michigan sparked a broader selloff in AI-linked stocks. The development weighed heavily on tech giants, with Oracle, Nvidia, and Broadcom also underperforming amid uncertainty about capital allocation for infrastructure expansion.

The decline followed reports that a key partner refused to back the Michigan data center initiative, raising questions about Alphabet’s ability to scale its cloud and AI operations. This came amid heightened scrutiny from European regulators, who are investigating whether Google violated antitrust rules by favoring its services and improperly using third-party content for AI training. These regulatory headwinds, combined with broader market skepticism about AI investment returns, amplified selling pressure.

Alphabet’s stock had surged 57% year-to-date, nearing its 52-week high of $323.44, but recent volatility reflects growing risks in the sector. Analysts noted that while the drop could create buying opportunities for long-term investors, near-term challenges—including regulatory fines and slowing AI adoption—remain critical hurdles. The sell-off underscores shifting investor sentiment toward tech stocks, particularly as Oracle’s recent cloud sales miss fueled doubts about the sector’s growth trajectory.

Market analysts are closely watching whether this correction will persist or reverse in the next quarter. While Alphabet’s strong balance sheet and long-term AI roadmap offer some optimism, near-term regulatory and capital allocation risks remain focal points for investors. With the tech sector’s momentum waning and the broader S&P 500 index showing signs of consolidation, the next several weeks may determine the direction of the tech rally.

Until then, traders are advised to remain cautious, particularly as macroeconomic data and central bank policy decisions could further influence market dynamics. Investors may consider hedging exposure through diversified positions or monitoring the stock’s response to key earnings and regulatory developments over the next few months.