Alphabet's Drone Bet Meets Wall Street's AI Math: Wing Picks Fort Worth as Search Growth Cools

Alphabet's week ended on a split note: a manufacturing announcement from its drone arm, a firmer share price, and a fresh look at the company's investment holdings — all set against lingering doubts about what its artificial intelligence spending is actually returning.

Wing, the company's delivery-drone subsidiary, said Friday it will commit up to $125 million over two years to a production facility in Fort Worth. The plant is designed to turn out tens of thousands of aircraft a year across 15,000 square feet and could support as many as 100 jobs, giving the Texas site both manufacturing capacity and a hiring boost.

The move lands as investors remain fixated on Alphabet's data-center budget. Media reports indicated shareholders took issue with negative free cash flow and plans for sharply higher capital expenditures in 2027 when the company reported roughly two weeks ago. Growth in Google Search and YouTube advertising also fell short of some expectations.

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Search under a microscope as AI Overviews spread

That concern has a name attached to it. Wells Fargo analyst Ken Gawrelski cut his price target on Alphabet to $365 from $371 on Nov. 2, keeping an "Overweight" rating. He pinned the softening momentum in search revenue largely on the widening rollout of AI Overviews, turning attention to how the company's own AI features are affecting the core business.

The third-quarter 2026 numbers, reported about two weeks ago, provide the backdrop. Revenue reached $127.58 billion, according to AP, against analyst estimates of $127.97 billion. Search and other advertising revenue climbed 12% to $63.3 billion — growth that also trailed some analysts' forecasts. Earnings per share came in at $2.12, including an $8.7 billion loss on equity holdings. Management said on the call that capex would rise substantially in 2027 without specifying a figure, keeping capital needs in the spotlight alongside the advertising business.

A broad tech selloff, then a rebound

Thursday's session brought a wider retreat in technology stocks, with Alphabet among the names that gave ground as investors weighed the returns on hefty AI infrastructure outlays. Reports also pointed to possible obstacles to data-center expansion following Democratic gains in the midterm elections, pairing infrastructure questions with doubts about the economics of AI spending. By Friday the stock had recovered 1.5%.

A $548 million Qualcomm stake and a bigger SpaceX position

Friday also brought Alphabet's investment portfolio into view. Per Reuters, the company disclosed a Qualcomm position worth nearly $548 million, comprising almost 3 million shares as of September. Reuters further reported a larger SpaceX holding — roughly 555 million shares, up from 551.2 million previously. Alphabet filed its stake disclosure for the quarter ended Sept. 30, 2026, with the U.S. securities regulator the same day.

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