Alphabet's stock experienced a decline of more than 4% following a European Union directive mandating Google to provide search and Android data to competitors. The stock was trading around $353 on Thursday, a significant drop from a peak of $370 earlier this week, according to TradingView data.

This downturn occurs amidst concerns over the delayed launch of Gemini 3.5 Pro, Alphabet's upcoming flagship AI model. Originally anticipated for a June release, CEO Sundar Pichai has indicated that engineers are still dealing with performance coding issues. Rival models now reportedly outperform Gemini in enterprise benchmarks, raising alarms within the company.

Regulatory Challenges Intensify

In addition to the market pressures, the European Commission has ordered Google to make 11 Android features accessible to competing AI assistants and to share anonymized search data beginning in January 2027. Google has expressed objections, arguing that such data sharing could compromise user privacy and national security, stating that the directive could expose personal searches to unfamiliar companies without proper anonymization or consent.

Meanwhile, a potential fine related to a separate investigation under the Digital Markets Act could be levied against Google next week. The combination of these regulatory developments coincides with increasing antitrust scrutiny from U.S. institutions regarding Google's dominance in search.

Despite these challenges and the stock’s volatility, investment mogul Warren Buffett's recent endorsement has provided a temporary boost. In an interview with CNBC, he revealed that he built his position in Alphabet, which now exceeds $31 billion, making it one of his top holdings after Apple and American Express. Although Buffett acknowledged Alphabet's value, he noted it does not rank among his favorite Berkshire-owned companies.

Furthermore, expectations are high for Alphabet's upcoming second-quarter earnings report, scheduled for July 22, with analysts predicting earnings per share of approximately $2.86, a nearly 24% increase year-over-year. Investors are particularly focused on the performance of Google Cloud, which expanded by 63% to reach nearly $20 billion last quarter.

This material is informational and not financial advice.