Alphabet raised its 2026 capital expenditure forecast by $15 billion at the midpoint to a range of $190 billion to $205 billion, saying spending will increase further in fiscal 2027. This aggressive investment pushed second-quarter free cash flow into negative territory at minus $5.8 billion, the first negative quarterly reading in the company’s history, despite an 82% year-over-year surge in Google Cloud revenue. The stock fell 7% the day after earnings. Investors now await results from Amazon, Meta and Microsoft next week, with all three companies under pressure to justify their massive spending on AI infrastructure.
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