Alphabet stock fell 4.4% on July 16 after Google announced it was delaying Gemini 3.5 Pro, its flagship AI model, just days before the company reports quarterly earnings. The delay marks a setback for the search giant as it faces mounting pressure in the competitive AI race.
Google is months behind schedule on delivering Gemini 3.5 Pro, according to Bloomberg, citing sources familiar with the matter. The model’s coding capabilities fell short of internal expectations, prompting the company to rebuild portions of the AI system.
The timing is particularly sensitive: Alphabet will report its Q2 2026 financial results on July 22, with a conference call at 1:30 p.m. Pacific Time. The Gemini delay announcement came four days before that earnings event, adding to investor concerns about the company’s AI development trajectory.
Coding has become a critical battleground for AI companies. Earlier in July, OpenAI released its GPT-5.6 Sol model, which CEO Sam Altman said is 54% more token efficient on agentic coding tasks. Meta also launched its Muse Spark 1.1 AI model, described by the company as its “strongest model for agentic and coding work yet.” Google’s delay underscores how quickly the competitive landscape is shifting.
Google originally announced Gemini 3.5 Pro in May at its annual Google I/O developer conference, saying the model was being used internally but would be ready for broader rollout in June. That deadline has now slipped to July and beyond.
An Alphabet spokesperson told CNBC the company is “shipping quickly across a wide range of models while keeping them highly cost-effective for customers,” adding that it is “currently testing 3.5 Pro, an upgraded Flash model, and other models with partners.”
Sources
- CNBC — Alphabet shares fell 4% on July 16 following the Gemini 3.5 Pro delay announcement and details on coding performance shortfalls
- Bloomberg — Reported Google is months behind schedule on Gemini 3.5 Pro due to improvements in capabilities; coding was short of internal expectations
- Yahoo Finance — Confirmed Alphabet stock closed down 4.4% on July 16, 2026
- Alphabet Inc. (Official) — Announced Q2 2026 earnings conference call for July 22, 2026 at 1:30 p.m. PT
