Alphabet raised its 2026 capital spending forecast to between US$195 billion and US$205 billion on July 22.

The increase followed Google Cloud revenue rising 82% to US$24.8 billion in the second quarter, while total revenue beat analyst estimates.

The new range is up from the US$180 billion to US$190 billion forecast Alphabet gave last quarter.

It would be roughly double last year’s US$91 billion, showing a sharp increase in the company’s AI infrastructure spending.

Shares fell about 3% in extended trading after CFO Anat Ashkenazi said demand still exceeded Google’s capacity and that faster-than-expected capacity deliveries also pushed up the forecast.

The market reaction also came after adjusted earnings per share came in at US$2.85, missing forecasts.

Alphabet also reported negative free cash flow of US$5.9 billion for the quarter.

Analysts also pressed CEO Sundar Pichai on Gemini 3.5 Pro after Google missed its June rollout target.

Pichai said Google was still testing Gemini 3.5 Pro, had started training Gemini 4, and remained committed to staying at the frontier of AI model development.

Alphabet also said it recognized revenue from direct sales of its TPU chips for the first time in the second quarter, though Ashkenazi said most revenue from those agreements would come next year.

🔗 Source: Reuters

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