Alphabet (GOOGL) Stock Drops 7% After Raising AI Spending to $205 Billion
TLDR
- Alphabet Q2 revenue hit $119.80 billion, up 24.2% year over year, beating estimates of $116.53 billion
- Google Search generated a record $63.3 billion in Q2, up 17%; Google Cloud surged 82% to $24.8 billion
- Alphabet raised its 2026 CapEx forecast to $195Bโ$205B, up from the prior $180Bโ$190B guidance
- GOOGL stock dropped ~7% after the report and is now down 20% from its all-time high
- Alphabet was also hit with an EU antitrust fine of approximately $1 billion
Alphabet (GOOGL) reported Q2 2026 earnings after the bell on Wednesday, and on paper it looked like a blowout. Revenue came in at $119.80 billion, beating analyst estimates of $116.53 billion. EPS hit $9.11, miles ahead of the $2.87 consensus.
But the market wasnโt cheering. GOOGL stock dropped around 7% after the report, and it now sits roughly 20% below its recent all-time high.
The selloff came down to one thing: spending. Alphabet raised its 2026 CapEx forecast to between $195 billion and $205 billion, up from the prior guidance of $180 billion to $190 billion. That follows $91 billion in spending last year.
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