Alphabet stock has tanked to close out the summer because of a 'brain drain' -- what may happen to it next

Alphabet's stock has taken a significant hit, dropping 6% over the past month, while the S&P 500 has seen a 3% increase. The decline can be attributed to two main factors: a slower-than-expected growth in search results, and a significant brain drain within the company. Demis Hassabis and Jeff Dean, two prominent figures, have left their roles, with Hassabis taking on the position of chairman and chief scientist at Google DeepMind.

Jeff Dean, who had been with the company for 27 years, has departed to start his own venture. These departures have raised concerns about the potential impact on Alphabet's business, although Eric Sheridan, a business unit leader at Goldman Sachs Research, believes the company has a "very deep bench" and will not be significantly affected.

Despite the brain drain, Alphabet's second quarter was a strong one, with Google Cloud revenue surging 82% to $24.8 billion and the company's cloud backlog reaching $514 billion. YouTube also reported impressive results, with revenue growing 13% year-over-year to $11.1 billion, surpassing expectations. Alphabet's capital expenditures for the second quarter were $44.9 billion, slightly above forecasts, and the company has raised its full-year capital expenditures guidance to $195 billion to $205 billion.