Investing.com -- Alphabet shares fell about 5% on Monday after a series of high-profile departures from its artificial intelligence division fueled investor concerns over intensifying competition for top AI researchers.

Shares continued to see selloff on Tuesday as shares were down nearly 2% in premarket trading.

The latest setback came after John Jumper, a Nobel Prize-winning scientist and Google DeepMind executive, reportedly left to join rival AI startup Anthropic. His departure follows recent exits by Gemini co-lead Noam Shazeer and Google's head of AI go-to-market, both of whom moved to competing AI firms.

Jefferies, however, argued that the market reaction overstates the significance of the departures. The brokerage said the movement of elite researchers reflects a broader industry-wide battle for scarce AI talent rather than a deterioration in Google's competitive position. The firm maintained its Buy rating and $445 price target on the stock.

Analysts noted that Alphabet continues to benefit from decades of AI investment, a deep research bench, rapidly growing cloud operations and its proprietary tensor processing units (TPUs), which provide cost advantages in AI computing. The company employed nearly 195,000 people as of the first quarter, giving it one of the industry's largest pools of technical talent.

Jefferies also attributed part of the stock's decline to broader weakness across the so-called Magnificent Seven technology stocks as investors rotate capital toward newly public AI companies and frontier AI laboratories preparing for listings. Analysts said Alphabet's recent $85 billion equity raise has also raised concerns about rising AI infrastructure spending.

While the brokerage acknowledged that Google's Gemini models have lagged some rivals in coding and agentic AI applications, it argued that Alphabet's vast distribution across Search, Cloud and Workspace products reduces the need for Gemini to be the industry's top-performing model. Jefferies said Google's scale, user reach and infrastructure advantages remain key drivers of long-term growth.

The firm added that recent field checks remain supportive of the investment case and characterized the current pullback as a headline-driven event rather than a fundamental shift in Alphabet's AI outlook.