Alphabet's Q2 revenue beats forecasts, but stock sinks on capex hike
Alphabet beat analyst expectations for second-quarter revenue, but GOOGL shares fell after the company raised its 2026 capital expenditure forecast. Strong cloud growth pleased investors, but rising AI infrastructure costs raised concerns about near-term margins.
Alphabet posted second-quarter revenue above analyst expectations, with growth in its cloud segment drawing investor attention. However, GOOGL shares fell in after-hours trading after the company again raised its 2026 capital expenditure forecast.
Investors are concerned that heavy spending on AI infrastructure could pressure near-term profit margins. Company executives defended the higher spending as necessary for long-term growth, pointing to continued strong demand for cloud services.
Analysts note that Alphabet must keep investing to avoid falling behind in the AI race. Other major technology companies are expected to announce similar increases to their capital spending plans in the coming weeks.
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