Alphabet at a Crossroads: EU Antitrust Fine and Druckenmiller's Exit Contrast with Berkshire's Massive Cloud Wager

Alphabet faces stark investor divide: Druckenmiller sells over valuation, Berkshire triples stake. EU antitrust fine looms, but cloud revenue jumps 63% and $190B AI capex unfolds.

The case for Alphabet has rarely looked more schizophrenic. Stanley Druckenmiller has dumped his entire stake, worth over $120 million, citing a valuation that has stretched from a forward price-to-earnings ratio of 15 at the start of 2025 to 27 today. At the same time, Berkshire Hathaway, under Greg Abel, tripled its Alphabet position in the first quarter of 2026, propelling the stock to the fifth-largest holding in the conglomerate's portfolio. The divergence is stark — and it captures the central tension around the Google parent.

Adding to the pressure, the European Commission is preparing to slap Google with a fine in the high hundreds of millions of euros for alleged violations of the Digital Markets Act. The investigation, opened in March 2025, centers on claims that Google unfairly favors its own services in search results. A decision is expected before the EU's summer break. The penalty would come on top of more than €8 billion in fines Google has already paid in previous European antitrust cases. Alphabet has pushed back, arguing that the DMA requirements are damaging the user experience.

The cloud business is the big reason why Berkshire, and many analysts, remain bullish. Google Cloud's revenue surged 63% in the latest quarter to $20 billion, while operating profit tripled. That momentum has prompted Alphabet to lock arms with Blackstone in a $5 billion joint venture to build an "AI Compute-as-a-Service" platform, powered by Alphabet's custom Tensor Processing Units and software know-how. The partnership aims to deliver 500 megawatts of TPU capacity within a year, with total investment potentially hitting $25 billion — a direct challenge to specialized cloud players like CoreWeave. Alphabet will also sell access to its chips to external customers including Anthropic and Meta, reducing its reliance on third-party hardware.

The broader capital expenditure picture is staggering. Alphabet plans to spend $190 billion in total for 2026, much of it funneled into infrastructure for next-generation AI services. Critics point out that the price-to-cash-flow multiple of 27 is historically rich for the stock, and whether that spending pays off hinges on Alphabet maintaining its edge in the AI race.

Competitive pressures are already forcing price cuts. Alphabet slashed prices on its Gemini models by 20%, and at Google I/O it unveiled Gemini Flash 3.5 as a more cost-efficient alternative to rival offerings. More profound is the overhaul of search itself. Two projects — "Antigravity" for AI orchestration and "Gemini Omni" — represent the first fundamental redesign of the search interface in 25 years. That is no cosmetic tweak.

Meanwhile, Alphabet's autonomous-driving unit Waymo hit a speed bump in May. The robotaxi service paused highway operations in San Francisco, Los Angeles and Phoenix after safety incidents and problems with floods and construction zones. Roughly 3,800 vehicles were recalled, and a software update is being rolled out to improve handling in tricky environments. Still, Waymo is logging 500,000 paid rides per week and has introduced audio-based age verification.

The stock trades at around €338, within 2% of its May 14 record high and up 25.5% year-to-date — more than double over the past twelve months. The relative strength index of 62 suggests no overheating. Analysts are overwhelmingly bullish, with 26 buy ratings, 7 holds and zero sells. Price targets span a wide range from $305 to $400, reflecting precisely the same divide that Druckenmiller and Berkshire embody. The EU fine could weigh on sentiment in the near term, but the broader narrative remains tied to whether Alphabet can convert its $190 billion infrastructure bet into durable growth.