Alphabet’s $462 Billion Cloud Backlog Takes Center Stage Amid Gemini Delay, EU Pressure, and Buffett’s Backing

Alphabet's cloud order book nearly doubled to $462 billion, providing a strong counterweight to AI model delays and EU regulatory pressures, with long-term growth intact despite recent stock decline.

Alphabet is heading into its second-quarter earnings report with a powerful counterweight to the recent noise around its artificial-intelligence road map: a cloud-services order book that has swelled to $462 billion. That backlog, nearly doubling in a single quarter, is the metric many analysts are pointing to as evidence that the Google parent’s long-term growth story remains intact, even as near-term headwinds from a delayed Gemini model and fresh European regulatory demands have knocked the stock more than 13% below its May peak.

The shares ended the week at €303.10 in European trading, down 2.15% on Friday and 3.12% for the five-day stretch. The stock now stands roughly 13.6% below its 52-week high of €350.75, hit in mid-May, and has slipped under its 50-day moving average of around €320. Yet the 200-day average of €278.47 still sits comfortably below the current price, signaling that the longer-term uptrend is unbroken. The 14-day relative strength index of 41.8 puts the stock in neutral territory, suggesting the market is recalibrating after a volatile week rather than tipping into panic.

The immediate trigger for the sell-off was a Bloomberg report on July 16 that Google’s next flagship AI model, Gemini 3.5 Pro, is being delayed by several months. CEO Sundar Pichai had unveiled the model at the Google I/O conference in May and promised a commercial launch in June. According to the report, a late-June retraining run failed to meet internal benchmarks, with older model checkpoints sometimes outperforming the new version. Google said it is still testing 3.5 Pro and a revamped Flash edition with partners, including discussions with the U.S. government, but declined to give a new release date.

The timing is especially awkward given the competitive landscape. OpenAI already has GPT-5.6 Sol in the market, Anthropic is pushing its Mythos and Fable-5 models, and Meta is advancing Muse Spark 1.1. But the most disruptive news came from Chinese player Moonshot AI, which mid-July unveiled its open-weight Kimi K3 model with 2.8 trillion parameters and top scores in coding benchmarks. The Kimi K3 announcement sent shockwaves through global tech markets: the Philadelphia Semiconductor Index tumbled 5.7% on July 17, entering bear-market territory after a weekly loss of roughly 11%. Alphabet shares were caught in the broader downdraft, and the Gemini delay further amplified concerns about whether Google is losing its AI edge.

Adding to the regulatory overhang, the European Commission is tightening its grip on Google through the Digital Markets Act. Starting in January 2027, the company must share anonymized search data — including ranking, query, click, and view data — with qualified rivals such as OpenAI, Perplexity, Ecosia, and DuckDuckGo, on the same terms Google uses internally. By August 2027, Android must open eleven system functions to competing AI assistants, provided security and privacy standards are met. Google has flagged privacy and security concerns. Separately, the European Court of Justice has upheld two landmark antitrust fines: an Android-related penalty of €4.1 billion and a Shopping-case fine of €2.4 billion.

Yet even as these clouds gather, one of the world’s most famous investors has doubled down on Alphabet. Warren Buffett, in a CNBC interview, personally confirmed that he initiated Berkshire Hathaway’s $31 billion position in the company, putting to rest speculation that it was the work of his designated successor, Greg Abel. Buffett described Alphabet as “more a winner” given its track record. Berkshire has participated in a private placement that is part of Alphabet’s broader $80 billion capital raise for AI infrastructure, buying $5 billion in Class A shares at $351.81 each and another $5 billion in Class C shares at $348.20. The entire holding now ranks among Berkshire’s largest single stock positions.

Analyst sentiment remains broadly bullish despite the recent turbulence. Bank of America reiterated a buy rating with a $440 price target, and BMO Capital lifted its target to $455. KeyBanc’s Justin Patterson raised his target from $425 to $445 ahead of the Q2 print, arguing that the market underestimates the resilience of Google Search and Google Cloud. Wedbush went further, initiating coverage with the most aggressive Street target of $671. Among the 64 analysts tracking Alphabet, 14 rate it a strong buy, 43 a buy, and just seven a hold; there are zero sell ratings. Morningstar called the Kimi K3-driven sell-off overdone and maintained its fair value estimate of $433, noting that Alphabet’s cloud infrastructure benefits from cheaper inference regardless of which AI model wins.

The earnings report, due July 22 after U.S. market close, will be the next key catalyst. Consensus forecasts call for earnings per share of roughly $2.87 to $2.88 on revenue of about $117 billion. Special attention will fall on Google Cloud, which grew 63% in the first quarter and now carries that $462 billion backlog. Alphabet has raised its full-year capital spending plan to between $180 billion and $190 billion, signaling that management intends to keep pouring money into AI capacity despite the setbacks on the model-development side. With Buffett’s personal endorsement, a wall of analyst optimism, and an enormous cloud pipeline, Alphabet enters earnings season with plenty of supporting data — but also with a list of near-term challenges that will test whether the stock can reclaim its May highs.