NEW YORK, July 21, 2026, 17:10 EDT
- The U.S. cash markets are shut. Alphabet finished at $347.15, down 1.4%.
- Estimated second-quarter capital expenditure of about $45 billion represents 38.5% of projected revenue.
- Alphabet will report its results on Wednesday, with a conference call scheduled at 4:30 p.m. Eastern Time.
Alphabet slipped 1.4% to $347.15 on Tuesday ahead of its second-quarter results. Early data shows capital expenditure growth approaching 100%, compared with a sales increase of 21.3%.
The Nasdaq Composite rose by 1.29%. There was a difference of 2.7 percentage points in performance. U.S. cash markets were not open at the time of publication.
Quarterly capital expenditures may approach $45 billion, close to twice the amount from the previous year. Revenue projections stand at $116.93 billion. This would place capex at 38.5% of revenue, up from 23.3%.
The expected rise in capital expenditures totals $22.6 billion, while anticipated revenue gains stand at $20.5 billion. That means expenditure growth would outpace increased sales by nearly $2.1 billion. The metric measures cash intensity rather than net profit.
This comparison draws from company filings and early analyst projections. All Q2 2026 figures in dollars are still provisional.
| Metric | Q2 2025 actual | Q2 2026 preliminary | Change |
|---|---|---|---|
| Total revenue | $96.43 billion | $116.93 billion | +21.3% |
| Capital expenditure | $22.45 billion | about $45.00 billion | +100.5% |
| Capex as a share of revenue | 23.3% | 38.5% | +15.2 points |
| Google Cloud revenue | $13.62 billion | about $22.34 billion | +64.0% |
| Google advertising revenue | $71.34 billion | about $81.11 billion | +13.7% |
Cloud continues to be the primary driver of growth, but it is not the sole contributor to funding. With a 64% increase, estimated cloud revenue stands at approximately $22.3 billion. This accounts for 19% of total sales and represents 43% of incremental revenue.
Google’s ad revenue is expected to climb 13.7%, which amounts to an increase of roughly $9.8 billion. That would keep advertising at almost 69% of the company’s total revenue. Search and advertising are still the main drivers of profits.
Cloud results in the first quarter exceeded expectations, with revenue climbing 63% to $20.0 billion and the operating margin at 32.9%. The backlog stood at $462 billion. Management anticipated a little more than half of the backlog would convert in the next 24 months.
Free cash flow for the first quarter reached $10.1 billion following capital expenditures of $35.7 billion. Capital expenditure guidance for the full year remains between $180 billion and $190 billion. Equity offerings, which total approximately $85 billion, represent nearly 46% of the midpoint within that guidance range.
Product execution is now adding complexity to that demand signal. On Tuesday, Google launched three lower-cost Gemini models. The company did not provide an updated timeline for Gemini 3.5 Pro, which remains postponed from June.
“Google’s strategy revolves around the ecosystem,” said Dave Wagner, portfolio manager at Aptus Capital Advisors. He described AI coding as a “very real growing concern.” Reuters
Alphabet shares declined 2.9% for the week ending July 17. By Tuesday’s market close, the stock was down 3.4% compared with its level on July 14. Despite this slide, Alphabet remains up nearly 13% since the start of the year.
This week begins with earnings due ahead of a call at 4:30 p.m. Eastern Time on Wednesday. Market watchers are focusing on cloud profitability, 2027 capital expenditure guidance and the rollout schedule for Gemini. Surpassing revenue forecasts may not fully address concerns about the returns on increased investment.
Execution and funding risks continue to be primary concerns. Increased capital expenditures, declining cloud profit margins, additional share dilution, or further delays in the model could put downward pressure on the stock.
The main figures to watch on Wednesday are capex, cloud margin, and free cash flow. These will indicate if operating returns are aligning with spending trends.
