Alphabet Stock Drops Over 6% Despite Earnings Beat Due to Increased Capital Expenditure Plans
Despite reporting better-than-expected second-quarter earnings, Alphabet (GOOG) stock fell more than 6%, as investors reacted negatively to the company's announcement of a significant increase in capital expenditures for 2026 and beyond. The firm raised its capex guidance from $180 billion–$190 billion to $195 billion–$205 billion, exceeding analyst expectations of $186.4 billion. Alphabet reported Q2 earnings per share (EPS) of $9.11 on revenue of $119.8 billion—well above the anticipated EPS of $2.95 and revenue forecast of $116.9 billion. Google Cloud saw an 82% year-over-year increase in revenue, reaching $24.77 billion, while advertising revenue came in at $81.63 billion. Investor sentiment has been cautious toward AI-driven tech stocks due to concerns over high capital spending and capacity constraints. Additionally, Alphabet delayed its Gemini 3.5 Pro model amid capability comparisons with rival models.
Tickers: $GOOG
Topics: AI Infrastructure Alphabet Capital Expenditures Google Tech Sector