Alphabet lifts 2026 capex to $205B as cloud revenue jumps 82%
What's the deal? Alphabet has raised its 2026 capital expenditure forecast to between $195 billion and $205 billion, up from the $180 billion to $190 billion projected at its first-quarter results. The increase, announced on July 22, follows second-quarter revenue of $119.8 billion, up 24% year-on-year.
Why now? Cloud revenue surged 82%, beating expectations for the first time in a year. Google's cloud order backlog — contracted volume not yet booked as revenue — climbed to $514 billion from $460 billion the previous quarter.
What's the endgame? Google is one of three major hyperscalers running large-scale AI computing infrastructure. The higher spend is meant to fulfil contracts it has already secured. "The strong performance in the cloud segment was driven by strong demand for AI infrastructure and AI solutions," chief executive officer Sundar PichaiDealroom has a profile for this one. Try Dealroom → said on a conference call.
What could go wrong? Despite the earnings beat, Alphabet's stock fell about 3% in after-hours trading after it reported free cash flow of negative $5.9 billion. The scale of the spending is testing investor patience with the returns on AI infrastructure.
The signal: At the top of its range, Alphabet's outlay would exceed AmazonDealroom has a profile for this one. Try Dealroom →'s $200 billion, the previous high among major hyperscalers. That spending is a boon for memory makers supplying the buildout, including SK hynixDealroom has a profile for this one. Try Dealroom →, Samsung ElectronicsDealroom has a profile for this one. Try Dealroom →, and MicronDealroom has a profile for this one. Try Dealroom →.
Read more: Seoul Economic Daily
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