Why Alphabet Inc (GOOGL) Is Rationing Gemini Access for Customers

Alphabet Inc (NASDAQ:GOOGL) is one of Peconic Partners’ stock picks. Some 265 hedge funds are backing Alphabet stock. Over the past year, Alphabet shares have more than doubled, and analysts continue to see upside potential in the shares.

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Demand for Alphabet Inc (NASDAQ:GOOGL)’s Gemini AI model is outpacing supply so much that the company has had to limit customers’ use of the model as it struggles with capacity constraints. On June 28, the Financial Times reported that Google capped Meta Platforms’ access to Gemini after the Facebook parent requested more Gemini capacity than Google could provide. Other customers have also been hit with Gemini access restrictions.

Meta uses Gemini for tasks like coding, content moderation, and customer service. Gemini is part of Google’s cloud business, which generated more than $20 billion of revenue in Q1 2026. The company said its cloud sales would have been higher if it were able to keep up with demand.

In a sign of surging cloud demand amid AI adoption, Google’s backlog of cloud contracts nearly doubled from the previous quarter to more than $460 billion in Q1. Google is racing to expand its cloud computing capacity to address the growing demand for Gemini resources. As part of this effort, Google has struck a deal to lease computing capacity for Elon Musk’s SpaceX.

Alphabet Inc (NASDAQ:GOOGL) is a global technology conglomerate. Through its Google unit, it provides cloud computing, digital advertising, and various hardware products. Alphabet also provides robotaxi services through Waymo.

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