Gemini AI Delays: Alphabet Faces Q2 Earnings Pressure

Alphabet faces pressure ahead of its Q2 earnings report. This is due to delays with its Gemini AI model. Investors are looking for updates on the delayed Gemini AI model. What's happening is that the launch of Gemini 3.5 Pro, a key AI model, has been pushed back from June. This delay occurred because internal training benchmarks for AI coding and complex tasks did not meet targets. This comes as open-source competitors and rivals like OpenAI continue aggressive release cycles. Alphabet also raised its 2026 capital expenditure guidance to 180 to 190 billion dollars to build out data centers and infrastructure. Free cash flow dropped sharply in Q1 as a result. Investors are now watching Alphabet's rising capital expenditures and its cloud business for signs of revenue generation. This matters because it raises questions about the pace of returns from Alphabet’s AI strategy.