Alphabet raises 2026 capex forecast to $195-205B after Google Cloud revenue surges 82% to $24.8B

Published Jul 22, 08:05 PM UTC

Alphabet reported its best-ever quarter for Google Cloud, with revenue surging 82% to $24.8 billion, beating analyst expectations. However, the company raised its 2026 capital expenditure forecast by $15 billion to between $195 billion and $205 billion, citing demand outpacing investment. Shares fell 3% in extended trading after the announcement. Alphabet also reported its first-ever negative free cash flow of $5.9 billion, raising investor concerns. The company's AI efforts faced scrutiny due to delays in launching its flagship Gemini 3.5 Pro model, with competitors like Anthropic and OpenAI rolling out upgrades. CEO Sundar Pichai acknowledged areas needing improvement, such as coding, but expressed confidence in future models. Alphabet began recognizing revenue from direct sales of its TPU chips for the first time. Total revenue reached $119.8 billion, beating estimates, while adjusted EPS of $2.85 slightly missed projections.