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U.S. tech giants dive after sharply raising spending forecasts

2026-07-23·newswire-us-stock-002757
U.S. tech giants dive after sharply raising spending forecasts.

After the market close on Wednesday Eastern Time, Google parent company Alphabet announced its second-quarter financial results. The financial report showed that the company's second-quarter revenue and profit performance were better than expected, with the Google Cloud division achieving the strongest growth in recent quarters.

Specifically, Alphabet’s second-quarter revenue was US$119.8 billion, a year-on-year increase of 24%; it is estimated to be US$117.02 billion.

Second quarter operating profit was US$40.77 billion, with an estimate of US$40.55 billion; second quarter capital expenditures were US$44.92 billion, with an estimate of US$44.15 billion; second quarter Google Cloud revenue was US$24.77 billion, with an estimate of US$22.46 billion; second quarter Google service revenue was US$94.54 billion, with an estimate of US$94.32 billion.

However, Google parent company Alphabet further significantly raised its full-year expenditure forecast. The 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 analysts' average forecast 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.

In the second quarter, Google parent company Alphabet’s capital expenditures totaled $44.92 billion, compared with the estimate of $44.15 billion.

Anat Ashkenazy, Google's chief financial officer, said on the earnings call that most of Google's capital expenditures are used for technical infrastructure to support the construction of artificial intelligence, with about 60% of infrastructure investment going to servers and 40% to data centers and network equipment.

It is worth mentioning that free cash flow was negative $5.9 billion in the quarter as expenditures for the acquisition of property and equipment exceeded cash flow from operating activities. This is also the first time in the company's history that it has experienced negative cash flow.

Affected by this, the stock price of Alphabet, Google's parent company, fell in after-hours trading on U.S. stocks, once falling by more than 4%.

#Stocks #Google #AI #Earnings

Full text

U.S. tech giants dive after sharply raising spending forecasts

After the market close on Wednesday Eastern Time, Google parent company Alphabet announced its second-quarter financial results. The financial report showed that the company's second-quarter revenue and profit performance were better than expected, with the Google Cloud division achieving the strongest growth in recent quarters. Specifically, Alphabet’s second-quarter revenue was US$119.8 billion, a year-on-year increase of 24%; it is estimated to be US$117.02 billion.

After the market close on Wednesday Eastern Time, Google parent company Alphabet announced its second-quarter financial results. The financial report showed that the company's second-quarter revenue and profit performance were better than expected, with the Google Cloud division achieving the strongest growth in recent quarters. Specifically, Alphabet’s second-quarter revenue was US$119.8 billion, a year-on-year increase of 24%; it is estimated to be US$117.02 billion. Second quarter operating profit was US$40.77 billion, with an estimate of US$40.55 billion; second quarter capital expenditures were US$44.92 billion, with an estimate of US$44.15 billion; second quarter Google Cloud revenue was US$24.77 billion, with an estimate of US$22.46 billion; second quarter Google service revenue was US$94.54 billion, with an estimate of US$94.32 billion. However, Google parent company Alphabet further significantly raised its full-year expenditure forecast. The 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 analysts' average forecast 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. In the second quarter, Google parent company Alphabet’s capital expenditures totaled $44.92 billion, compared with the estimate of $44.15 billion. Anat Ashkenazy, Google's chief financial officer, said on the earnings call that most of Google's capital expenditures are used for technical infrastructure to support the construction of artificial intelligence, with about 60% of infrastructure investment going to servers and 40% to data centers and network equipment. It is worth mentioning that free cash flow was negative $5.9 billion in the quarter as expenditures for the acquisition of property and equipment exceeded cash flow from operating activities. This is also the first time in the company's history that it has experienced negative cash flow. Affected by this, the stock price of Alphabet, Google's parent company, fell in after-hours trading on U.S. stocks, once falling by more than 4%.

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