Alphabet Raises 2026 Capex Guidance to $205 Billion, Depreciation Hit Starts in 2027

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Alphabet raised its 2026 capital expenditure guidance to a range of $195 billion to $205 billion, up from $180 billion to $190 billion. Chief Financial Officer Anat Ashkenazi said about 60% of last quarter's infrastructure investment went to servers, which the company depreciates over six years, implying roughly $20 billion in annual depreciation expense from this year's server purchases alone. Management also expects capital expenditures to increase significantly again in 2027, layering additional depreciation charges on top of those already accruing from 2025 and 2026 spending. The company reported second-quarter revenue of $119.8 billion, up 24% year over year, with Google Cloud revenue growing 82% to $24.8 billion and its operating income more than tripling to $8.8 billion. However, depreciation is already one of the fastest-rising cost items, and Ashkenazi warned that the infrastructure surge will continue to pressure the profit and loss statement through higher depreciation and related data center operations costs.

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Alphabet raised 2026 capex guidance to $195-205B and warned of rising depreciation costs pressuring P&L.

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