Alphabet Inc Class CRising AI capex pressures free cash flow, negative FCF, and increased debt

Alphabet shares closed at $343.54 on Wednesday, down 19% from their 52-week high of $408.61 on May 18, as rising AI infrastructure spending pressures free cash flow. Second-quarter 2026 capital expenditure doubled to $44.9 billion, and the company reported negative free cash flow of $5.855 billion, with trailing 12-month FCF down 20% to $53.3 billion. Alphabet raised its 2026 capex guidance to $195-$205 billion and expects investment to increase significantly again in 2027. The company raised about $49.6 billion through common and mandatory-convertible preferred equity, has another $40 billion ATM program available, and disclosed debt expanded from roughly $16 billion a year earlier to about $100 billion. Google Cloud revenue jumped 82% year over year to $24.8 billion in the second quarter, and cloud backlog reached $514 billion, up more than $50 billion sequentially. The Zacks Consensus Estimate for 2026 earnings is $20.51 per share, up 44.4% over the past 30 days, indicating 89.73% growth from 2025, while the consensus for 2026 revenues is $432.13 billion, up 26.02% year over year. Alphabet currently has a Zacks Rank #3 (Hold).
Alphabet Inc Class CRising AI capex pressures free cash flow, negative FCF, and increased debt
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