Alphabet Raises 2026 Capex Forecast to $205 Billion, Stock Drops 7%

Earnings Impact 4
โดย The Motley Fool·US·Read original
Summary · why it matters

Alphabet raised its 2026 capital expenditure forecast to as much as $205 billion, up from an earlier estimate of $180 billion to $190 billion, sending the stock down 7% and now 16% off its high. The company, which counts Berkshire Hathaway's Warren Buffett and Greg Abel among its largest investors, said demand for AI infrastructure is outstripping supply, and CEO Sundar Pichai and CFO Anat Ashkenazi reiterated expectations of solid returns on investment. The market's concern is that Alphabet was free-cash-flow negative in the second quarter and is taking on debt and selling equity to fund the build-out. However, the stock trades at a P/E of 17, near its lowest ever, and the company reported an 82% year-over-year increase in cloud revenue, with a cloud backlog of $514 billion, half of which is expected to be recognized as revenue over the next two years.

Impact on stocks 3

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Alphabet raised 2026 capex forecast to $205B, causing stock to drop 7% due to concerns about free cash flow and debt.

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