Alphabet AI spending draws Cramer scrutiny as shares fall 7%

Alphabet AI spending came under fresh scrutiny Thursday after CNBC’s Jim Cramer said the company’s rising capital expenditure made him less comfortable with its balance sheet, even after what CNBC described as a decent quarterly report. Alphabet shares fell 7%, while broader risk assets weakened as the S&P 500 dropped more than 1%.

The comments came during the CNBC Investing Club’s weekday “Morning Meeting” livestream. Cramer said he did not view Alphabet’s pullback as a buying opportunity because the company was increasing spending while the return on that investment remained uncertain. He said the position was held by his charitable trust, according to CNBC.

Markets were also under pressure from macroeconomic forces. CNBC said oil prices rose as conflict in the Middle East intensified, while Treasury yields climbed and the 10-year Treasury yield reached its highest level since January 2025. Cramer said he was glad the club had a 12% cash position, describing the market as being on a difficult run.

Jeff Marks, portfolio director for the CNBC Investing Club, said the rise in interest rates was a “worrying sign” and could complicate the Federal Reserve’s ability to keep rates unchanged in the second half of 2026.

Why is Alphabet AI spending a concern?

Alphabet is investing heavily in artificial intelligence infrastructure, which can support revenue growth but also raises capital spending. Capital expenditure, or capex, is money a company puts into long-term assets such as data centers, servers and other infrastructure, and investors track it because it can affect free cash flow and future returns.

CNBC reported that Alphabet’s AI adoption is helping top-line growth, but Cramer objected to the company’s view that its balance sheet remains in good condition. “They’re upping their spending with really an uncertain payback,” Cramer said, according to CNBC. “That’s not a good balance sheet.”

Cramer added that he prefers companies with strong balance sheets and said Alphabet no longer met that standard in his view. CNBC also reported that Google Cloud chief Thomas Kurian defended the company’s spending approach in a later interview with Cramer, calling the capex program “very, very disciplined.”

Dover and Honeywell move in opposite directions

Industrial earnings produced a split result for two other companies discussed by the CNBC Investing Club. Dover shares fell nearly 8% after what CNBC described as a mixed report. The industrial conglomerate posted weaker-than-expected sales, while operating margin and earnings exceeded estimates.

The main disappointment at Dover was an execution problem that caused the company to miss its refrigeration production volume target, according to CNBC. Cramer said he was “very disappointed” with Dover Chief Executive Richard Tobin and indicated the club was prepared to exit the investment.

Honeywell moved the other way, rising more than 6% after a quarter that CNBC described as strong. The company reported 4% organic revenue growth and a 10% increase in adjusted earnings per share.

Cramer said he supported Honeywell Chief Executive Vimal Kapur, calling him highly competitive. CNBC reported that Cramer’s charitable trust was long Honeywell, Dover and Alphabet.

Which stocks did Cramer mention in rapid fire?

At the end of the CNBC Investing Club meeting, Cramer discussed Tesla, ServiceNow and RTX in a rapid-fire segment, according to CNBC. The Investing Club said subscribers receive a trade alert before Cramer makes a trade in his charitable trust’s portfolio and that he waits before executing trades after alerts, with a longer delay when he has discussed a stock on CNBC TV.

This story draws on original reporting from CNBC.