Quick Read – GOOG’s free cash flow cratered 47% to $10 billion as Q1 capex hit $36 billion, more than double the year-ago spend. – Google Network ad revenue fell 4% and YouTube growth slowed to 11%, signaling cracks in the ad franchise funding Alphabet’s AI buildout. – Noam…
azeer’s move to OpenAI spooked investors, and prediction markets give Alphabet only a 15.5% chance of ending 2026 as the world’s largest company. – Alphabet (NASDAQ:GOOG) told investors on its Q1 2026 earnings call that it now expects to spend $180 billion to $190 billion on capital expenditures this year, raised from a prior range of $175 billion to $185 billion. That is guidance, not a reported result
Management also said 2027 CapEx will “significantly increase compared to 2026.” The company that built a nearly $2 trillion valuation on high-margin advertising is now pouring an ad-industry’s worth of cash into AI infrastructure every twelve months. If the company can grow its overall advertising revenue toward the $1 trillion level as many think is possible, this is a stock that’s trading at a relatively cheap level, though the jury remains out on this front. What It Means Alphabet spent $35.67 billion on capex in a single quarter, more than double the year-ago figure.
As a result, free cash flow unsurprisingly fell to $10.116 billion, down 46.63% year over year. For a business that historically converted ad dollars into cash at industry-leading rates, that swing is the story behind the story. The bull rebuttal is that ads are still growing.