Quick Read – GOOGL has fallen 13% from May highs as investors question whether returns can justify $185 billion in planned 2026 AI capex. – Alphabet’s free cash flow swung to -$6 billion in Q2, long-term debt nearly doubled to $98 billion, and the buyback was suspended. – Google…
oud revenue surged 82% to $25 billion in Q2, with Wall Street analysts still pricing GOOGL at a $434 average target. – CNBC’s MacKenzie Sigalos framed the tension bluntly, noting that “Alphabet shares are now in correction territory down 13% from their May all-time highs. Investors questioned the returns on its enormous AI build-out.” The math behind that skepticism is the story
Alphabet (NASDAQ: GOOGL) is spending at a pace that would have looked implausible a year ago, and the market is asking whether returns can keep up. The Capex Curve Is Bending Upward Sigalos flagged the pace: “Alphabet is already on pace to spend nearly $200 billion this year, with Q2 capex expected to double from a year ago. Bank of America sees spending approaching $300 billion in 2027.” Alphabet’s numbers back that up.
Q2 capex hit $44.924 billion, up 100.14% year over year, following $35.67 billion in Q1. Full-year 2026 guidance sits in the $175 billion to $185 billion range, roughly double FY2025’s $91.45 billion. Sigalos added the uncomfortable wrinkle on efficiency: “As rising component costs absorb more of that increase, each additional dollar buys less capacity.” That is the argument reshaping how the Street looks at hyperscaler ROI.