Google parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) made a decision that seemed unthinkable until recently.
It announced it will issue $80 billion worth of shares, a move that will slightly dilute its stock
On the surface, the move seems hard to believe. As of the end of the first quarter, it held $127 billion in cash, and its digital ad business generated over $64 billion in free cash flow over the trailing 12 months. That situation forces investors to confront this investment thesis head-on.
Do the massive capital expenditures (capex) spending and share sales mean investors should sell the communications stock, or should they continue to hold shares in the Google parent? Alphabet’s capex spending Despite Alphabet’s tremendous financial resources, the capex spending seems concerning on the surface. The company pledged to spend between $175 billion and $185 billion in capex in 2026 as it seeks to compete in the artificial intelligence (AI) market.