Alphabet raises capital expenditure guidance again to accelerate deployment of AI data center
Alphabet Inc． It once again raised its already high capital spending forecast for 2026 and told investors that spending could exceed $200 billion as the company steps up to build the necessary computing power to support its artificial intelligence ambitions. The Google parent company expects capital expenditures in 2026 to be between $195 billion and $205 billion, up from its previous guidance of a maximum of $190 billion and above the average analyst estimate of about $186 billion. The revised guidance reflects the company's accelerating expansion of AI computing power and efforts to obtain more revenue from cloud computing customers. This outlook may further intensify investor scrutiny of Alphabet's artificial intelligence investments. Wall Street has been looking for evidence that companies' massive investments in AI are generating new growth rather than dragging down profits. As the first major U.S. technology company to announce results this earnings season, Alphabet's performance will affect market expectations for the entire technology industry, which has collectively committed hundreds of billions of dollars to AI infrastructure. Alphabet shares fell 4% after hours on Wednesday. The stock closed at $342.09 per share in New York on Wednesday. The capital expenditure guidance overshadowed the company's otherwise solid second-quarter results. In the quarter ended June 30, cloud business revenue was US$24.77 billion, a year-on-year increase of 82% and higher than analysts’ expectations of US$22.46 billion. Cloud business backlog increased to $514 billion. CEO Sundar Pichai said on a call with analysts late Wednesday that the cloud performance "benefited from strong demand for AI infrastructure and AI solutions."